A newbie question about the forex economic calendars

Hi, I have a question about the forex calendars, about how I am going to use it exactly.

The events have a previous, consensus and actual. If I understand this correctly, previous is the value of the event, before they made a prediction, and consensus is the prediction, whereas actual is the real factual value at the event.

So when the event is beginning, they say if it’s ‘‘better than expected’’ or ‘‘worse than expected’’.

If it’s worse than expected, does that mean that the currency is likely to drop, and vice versa?

So if it says worse than expected, it’s a good idea to try to ‘‘sell’’ the currency?

Let’s say its the USD that was ‘‘worse than expected’’, then I could judge where the eur/usd was heading, based on the calendar?

Hopefully I got it correctly. :slight_smile:

Thanks in advance!

That is correct as far as if it is lower than expected/previous then some cases it goes lower and vice versa, but you have to be careful on that because sometimes it can change from the news minutes- hours before it has even been announced so you could be sitting there waiting and see the economic calender topic and nothing changes in the market and you look back at the chart and it might have already passed and people have already made up there mind to short or buy, but it’s all about timing and knowing the market. The simple fact is if it is lower than expected then yes you could short and hopefully hit a run or vice versa.

Hi MountainStream,

It used to work the way you describe, but in these days of central bank intervention (quantitative easing), good economic news could be bearish for the market if traders believe it means the Fed is more likely to raise rates sooner. That’s why in addition to knowing the consensus values going into an economic announcement, it’s good know what market reactions analysts expect based on whether the numbers come out better or worse.

Yep, comparing the consensus vs. actual result is one way to look at it, and a better-than-expected result could result to currency gains while a weaker-than-expected read could spark losses. Another thing to consider though is whether or not the actual result is better or worse compared to the previous release or if it shows a shift or continuation from the current trend (ex: sudden negative jobs figure after five months of consecutive gains).

Hay sir, some traders actually use economic calendar as their fundamental analysis, but there are so many economic calendar providers. So, which economic calendar source that can be trusted and very actual?.
In Liteforex, I’ve got free analytic tool called “Clawn n Horn”. its free for their clients. This tool contain many tool, fundamental, technical, economic calendar, and trading signal.

There are other factors to consider as well.
For example, you may expect better than consensus employment numbers to have a positive effect but looking deeper into the data could reveal that a lot of the new jobs were low paid, short term, or that overall productivity had dropped, all of which could have a negative impact.
Always dangerous trading the news, might be better to sit tight until the dust has settled. Its more important to not go bust than to make a quick buck.