How to use an economic calendar?

he strategies and trading methods you employ when trading with binary options will work well when keeping up to date with the economic calendar. This is where market news and financial data work simultaneously with global economic events, pushing asset prices in every direction.
An economic calendar contains all significant events that will surely influence the markets. You can get centralized information from these events, and capitalize on how the markets anticipate and react after relevant information is released on these occasions.

Here are some of the events that can be included in economic calendar for binary options:

Central Bank/ Federal Reserve Announcements

Monetary policy makers usually meet once a month to review and decide on macroeconomics data, monetary policies, as well as any changes to interest rates, taxation on different industries and other government intervention related to the trading markets.

Stipulations agreed upon on these meetings are then announced to the trading public, which is a widely-anticipated event by traders. Examples of this are the Federal Open Market Committee (FOMC), the European Central Bank, Chinese Central Bank and the Reserve Bank of India. A dramatic announcement, whether it is an improvement in rates or data related to unexpected results, typically brings massive market movements that may be felt for several days.

Speeches

Traders also await speeches from the Federal Reserve or Central Bank chairmen focusing on current trading perspectives and market quarterly projections. It usually attracts a wide pool of traders where significant projections are greatly elaborated, as well as specific matters related to the financial industry are discussed.

Non-Farm Payrolls (NFP)

For traders, this is one of the most anticipated economic events in the U.S. and abroad. It gives a statistical picture of the number of jobs added and lost for the previous month in the U.S. The NFP represents the total number of paid U.S. employees, excluding those employed in the farming industry.
You can learn of scheduled financial events in the economic calendar for binary options. You can inquire from your broker on how you can get information from these events. Or you may watch out for them from reliable sources such as the World Street Journal or Bloomberg. You may read our article on how to use this report for trading binary options here.

The Feds Fund Rate (FDFR)

Traders from all over the world have profound interest on this data as it is the interbank lending rate in the U.S., a country that plays a significant role in the global economy. As a key component in the US monetary policy, it can be a source of direction on how you can execute trades. A higher FDFR points to a less flexible economy since there will be less borrowing from lending authorities to fund projects and initiatives.

Consumer Price Index (CPI)

This is used to measure inflation when prices increase in the basket of consumer products and services purchased by households. This includes housing, food and beverages, transportation, apparel, medical care, education and communication.

Jobless Claims

This is a weekly report released by the U.S. Bureau of Labor that contains statistics on the total number of Americans filing for unemployment benefits. Traders can use information from this data as a gauge of economic momentum, indicating a strengthening or weakening labor market. Since this data is released on a weekly basis, it is not often possible to draw long-term conclusions but it does provide a snapshot that can also be used as a valuable indicator when executing trades.

Durable Goods Orders

This information is released by the Bureau of Census and gives information on pending job orders for durable goods from factories. This serves as a valuable indicator for the production capacity of a country, and the expected value that can be generated from the production and delivery of these goods.

Industrial Production Index

This represents a country’s ability to fulfill production output on mining, manufacturing and utilities. The index serves as an indicator of a country’s industry growth, as well as its role to propel the economy on a forward direction.

If you’re planning to use an economic calendar for your trading strategy then we highly recommend that you trade with a reputable brokerage like uTrader. You may click here to directly access their website.

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