forex for dummies

Economic calendar is created by economists where they predict different economics figures and values according to previous months. It contains next data:
Date — Time — Currency — Data Released — Actual — Forecast — Previous

For example: If the forecast is better than the previous figure, then US dollar usually is going to strengthen against other currencies. But when news are due, traders have to check the actual data.

If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e.g. America, Japan

The example of econimic calendar can be found here

Step to read economic Calendar

Impact factor — suggests how much influence current economic data is expected to bring along.

It is important to know the time of High impact data release if you trade affected currency pair.During actual news release market becomes volatile. The strength of the volatility depends on the "factor of surprise" brought in the news."Factor of surprise" can be defined as a level of unexpectedness, where traders compare Forecast data to Actually released data.

Medium impact economic data should also be kept in mind in case the factor of surprise turns to be high. Low impact data most of the time do not shift Forex market significantly.

Column Previous in Forex Calendar — provides data from last release.

Column Forecast indicates numbers that economists are predicting and expecting for the upcoming release today.

Column Actual is updated only after the data is out. At the very second when data becomes available it is instantly compared against Forecast values, and depending on overall positiveness or negativeness of the news for the currency plus taking into consideration the factor of surprise, price dips or rises in a matter of seconds.

Economic News impact — increased market volatility — usually lasts for 1-3 minutes (highest volatility); next 5-10 minutes market experiences corrective/adaptive volatility, where price settles in summarizing new market shift.

Profitable trades!

source:.forex-fundamental-analysis