This mind blowing free trading tool helps traders find an edge when it comes to trading news events.
Trading Tool Free - Economic Calendar with Deep Insights
Trading news can be risky business, due to the big volatility. But why is it, there is so much volatility around these times of big news data?
Forex news shapes the market on a global level. It shifts the paradigm and value of a currency for a variety of reasons, and can shape the decisions of corporate finance and personal finance too.
Understanding the economic effect of these decisions is important, as it allows traders to consider what the implications might be when an announcement is made. But what is more important than the implications, particularly to day traders?
Forex News Volatile Effect on Price
While implications often take time to soak into an economy, the effect of forex news on a market is big volatility.
This volatility goes both up and down, and doesn’t always go in the direction that the economic theory would predict.
That’s why this forex tool is a must have for traders. Read on if you want to develop an edge in some of the most volatile trading periods that exist in the forex markets.
Free Economic Calendar with Deep Insights
Deep insights for traders looking to find gaps in the volatility of forex news announcements, provided by FXTrading, which we also did a review on.
This broker gives you access to not only an FX calendar so that you are aware of when things occur, but also deep insights into the volatility of forex pairs, filterable by time frames after the announcement in question AND also by the announcement result verse the forecast (being higher, lower or matching the forecast amount).
Why Volatility is Good For Traders
You might here many people out there FEAR volatility, like it is the plague. Of course, there are risks involved when price moves, but there is also opportunity. If price doesn’t move, it wouldn’t be traded.
When price moves, it presents the opportunity for a buyer or seller to make decisions in an attempt to leverage that volatility to make money.
If the market doesn’t move at all, there isn’t an opportunity to be had.
Traders NEED price movement. This is why forex news is so important and talked about so often.
Trading Tool App (free)
The free trading tool app offered by FXTrading allows traders to map out their trade plan for news events every day, seeking opportunities to trade based on data and detailed price history.
What Tools do Traders Need?
Traders need tools to place their trades on and to make decisions on assets they are trading. Tools such as a platform where trades are placed is a general one, then it goes deeper into charting software, spreadsheets and data tools along with indicators, expert advisors (EAs), order flow and footprint charts along with economic calendars with insights into previous events.
What a trader needs, is to be able to access the market, and also to be able to read and understand current price and plan what the future pricing might be. The needs depend on how the trader seeks to estimate future price, since there are many methods and strategies that can be used.
Some common tools include:
- Bollinger Bands
- Camarillo Levels
- Excel Spreadsheets to analyze data
- Official Reports and Statements
- Pattern recognition software
What Does Every Day Trader Need?
Every trader needs access to the market. Other than this, the tools required varies greatly. Some traders don’t even need to see charts or listen to news events.
The trader’s strategy will define the tools that are most important in understanding what shifts price when it matters to that trader.
A trader that trades news events may not care about the RSI indicator, or a technical trader may not be concerned with the news, other than perhaps avoiding trading around news events. Other traders may not take into account patterns while some may prefer patterns as a way of finding trading opportunities.
Each strategy will be different, and it is about defining what makes price move in the market you are looking at, and how the trader can isolate certain movements probabilistically.
What do Day Traders Use to Trade?
Day traders often use indicators to form a technical viewpoint, while some also enjoy working with news events. If the day trader is looking to leverage news events, the economic calendar by FXTrading will be a vital tool, best of all, it’s free with a live account.
How Does the Calendar Work?
In the image below shows an event that occurred on the day of this article being created. The AUDCAD rise sharply, followed by a decline in price at the time of the event.
Predicting that the actual data would match the forecasted data, there is a lot of red on this volatility chart, showing that the probability of the market going short is potentially higher than the market being bullish.
The market spiked up, and looking for short opportunities, knowing the market is more likely to go down following a similar event (such as 86% of the recent matching previous events), there was some good shorting opportunities in the market. Even though the market went up, short trades were made that went well.
It’s all about stacking probabilities in your favor and with charts like this, it can be easily visualized.
86% of events ended bearish after 4 hours. Great odds on that factor alone. The other consideration is, what is the differential between other currencies. Have other currencies made increases or decreases to their interest rate, and is the AUD reaching a larger disparity by remaining still?
The market ended up rising over the 4 hours, following the event (not shown in this chart). The disparity of interest rates may have been a reason for the rise, but in saying this, there were a couple of nice entries that could have been made off the initial spike up at the time of the announcement.
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