Lesson 14: Using an Economic Calendar
Part of Module 4: Fundamental Analysis - The "Why" Behind the Moves
Introduction: The Trader's Schedule
In the last lesson, we learned about the "big mover" news events. But how do you know when they are going to happen? The answer is the Economic Calendar.
Analogy: A TV Guide for the Markets. An economic calendar is like a TV guide for the financial markets. It tells you exactly what "show" (news event) is scheduled, what time it will air, and how important it's expected to be. Checking it at the start of every trading day is a non-negotiable habit for a professional trader.
How to Read the Calendar
When you open a calendar from a source like Forex Factory or TradingView, you'll see a schedule with several key columns:
- Time: The exact time of the news release. Crucially, you must always set the calendar's timezone to your local time (e.g., EAT for Dar es Salaam).
- Currency: Shows which currency will be most affected (e.g., USD, EUR, GBP).
- Impact: The most important column for a new trader. It's usually color-coded. As a beginner, you should only focus on the High Impact (Red) events.
- Event: The name of the report (e.g., CPI, Non-Farm Payrolls).
- Forecast vs. Actual: The "Forecast" is the market's expectation. The "Actual" is the real number. The market moves based on how the actual number surprises the forecast.
A Practical Workflow
Vivid Example: It's Monday morning in Dar es Salaam. The first thing you do is open your economic calendar. You set the filter to only show High Impact news for USD and EUR. You see that on Friday at 3:30 PM EAT, the US NFP report is scheduled. You now know that you should be extra cautious, or maybe even avoid trading EUR/USD, around that specific time on Friday to avoid the extreme volatility.