3 key numbers
Look on the right of each indicator in these two calendars and you’ll see three columns: previous; forecast (or consensus); and actual.
- Previous shows what the figure was last time the data was released.
- Forecast shows the current consensus taken from experts in that sector.
- Actual stays blank until the figures are released.
When trading based on news releases, you need to understand the social and political issues in the currency zones you’re trading in. That’s why it’s best to start with a small number of zones, especially if you’re trading part-time.
Remember that every piece of economic news, however small, can influence a nation’s currency value. So, the more information you have the better.
That said, as with all trading, nothing is certain. As Brexit showed, forecasts are sometimes wrong, so use the economic calendar as a guide and not a rule book.
Forex trading basics for beginners
Main trading approaches
There are two main approaches to trading forex based on news releases: directional bias and non-directional bias.
- Directional bias means you are confident that a currency valuation will move in a certain direction when an announcement is made, so you invest before it happens. This is riskier than non-directional, so profits and losses can be higher.
- Non-directional bias means that you wait for the release of information before deciding whether to trade or not.