Results
    Brokers
      Compare Forex Brokers!
      Compare top Forex brokers side-by-side and find the best fit for your trading needs. Start your comparison now!
      Compare Now!
      Compare Forex Brokers!
      Compare top Forex brokers side-by-side and find the best fit for your trading needs. Start your comparison now!
      Compare Now!
      Alison Heyerdahl
      Edited by Alison Heyerdahl
      Author Chris Cammack
      Author

      Economic Calendar

      As a Forex trader in Uganda, staying informed and making well-timed decisions are essential for a successful trading strategy. An economic calendar is an indispensable tool for tracking and monitoring important local and global events that may impact the financial markets.

      Recurring economic events such as the Non-Farm Payroll (NFP) report, GDP growth figures, inflation rates, central bank announcements, and other key indicators have predictable effects on price direction, trading volume, and market sentiment.

      For Ugandan traders who focus on the major pairs like the EUR/USD, economic and political factors often play a significant role in price. These include inflation trends, interest rate decisions by the Federal Reserve and the European Central Bank, and shifts in employment growth and industrial output.  Knowing when economic data releases will occur is crucial for navigating the market volatility they create.

      Don’t forget that Uganda operates in the East African Time (EAT) zone, so it’s essential to adjust the timing of international economic events accordingly to ensure you never miss key opportunities in the market.

      Polygon icon
      Polygon icon

      Why Use an Economic Calendar?

      Economic calendars are especially useful for fundamental and positional traders who adopt a predictive approach to trading. They help traders anticipate potentially high-impact events and help them manage their risk exposure accordingly. As a result, traders may choose to adjust their positions, hedge their portfolios, or even avoid trading during times of heightened uncertainty.

      However, traders should be aware that unplanned events can also impact the currency markets. So, while most of the planned meetings and data releases will be in an economic calendar, it’s essential to keep abreast of other news that may affect the fundamentals of the currencies you trade. For example, in September 2022, the pound fell to a record low against the US Dollar. It resulted from the news that the UK government would reduce taxes, which would be offset by borrowing billions of pounds.

      How to Use an Economic Calendar

      1. Choose a Reliable Economic Calendar: Ensure the calendar provides accurate and timely information, with customisable settings based on your time zone and preferred currencies.
      2. Review the Calendar Regularly: Review your calendar daily so you can anticipate potential market volatility.
      3. Identify High-Impact Events: Good economic calendars will use colour-coding to identify the impact of data releases, i.e. yellow, orange, and red bars indicating low, medium, and high impact.  For instance, an interest rate announcement by the Bank of England will be colour-coded in red, because it will have a significant impact on the price of the GBP/USD.
      4. Evaluate the Importance of Each Event: Assess the event’s potential impact on the respective currency pairs, considering historical data and market expectations. For example, retail sales will impact the GBP/USD less than increasing unemployment in the UK.
      5. Inform your Trading Strategy: Use the economic calendar to plan your trades and align them with significant upcoming events.
      6. Monitor Consensus Forecasts: Be aware of the consensus on certain events and be prepared to adjust your positions once the news announcement has been released. When the consensus is vastly different from the actual figures, there may be a lot of volatility in the markets.
      7. Create a Risk Management Strategy: You should adjust your risk management strategy in anticipation of high-impact events. For example, set appropriate stop-losses and take-profits, manage your position size, and do not over-leverage your trades. 
      8. Integrate Technical Analysis: You should consider both the news event’s impact and technical indicators to make well-informed trading decisions.

      Remember that an economic calendar is just one tool among many in your trading arsenal. It provides valuable information but must be complemented with proper analysis, risk management strategies, and other relevant market data to make well-informed decisions.

      The bottom line is that you need to know the type of trader you are, and once you have figured that out, you will see how an economic calendar fits into your strategy.

      Polygon Image