How to Use the Forex Factory Economic Calendar: A Beginner’s Guide
For Forex traders, keeping track of economic news is extremely important because major economic releases can directly affect the currencies being traded.
One of the most widely used tools among traders worldwide is the Forex Factory Economic Calendar. This article provides a step-by-step guide, from setting up the calendar to using economic data for real trading analysis.
What Is the Forex Factory Economic Calendar?
The Forex Factory Economic Calendar is an online calendar that brings together important economic events and data releases from around the world.
It shows traders in advance which economic reports will be released, the date and time of each announcement, and the currencies that may be affected.
Its fast and accessible information makes the Forex Factory calendar an essential tool for many traders when planning their trades and managing market risk.
How to Set Forex Factory to Thailand Time
Before analysing economic news, the first step is to adjust the calendar to Thailand time.
Because Forex Factory is an international website, the default time displayed may not match your local time. Failing to adjust the Time Zone could cause you to miss an important announcement or trade at the wrong time.
After opening the Forex Factory website, look for the time displayed in the upper-right corner of the page and click on it.
Under Time Zone, select:
GMT+7 Bangkok, Hanoi
For Time Format, selecting the 24-hour format is recommended because it is easier to read and helps avoid confusion between a.m. and p.m.
Once the settings have been adjusted, click Save Settings. The Forex Factory calendar will then display all economic events in Thailand time.
Understanding the Main Sections of the Economic Calendar
After setting the correct time, the next step is to understand the information displayed in the calendar.
Meaning of the Date, Time, and Currency Columns
Date: The date on which the economic event or data release is scheduled.
Time: The scheduled release time based on the Time Zone selected in your settings.
Currency: The currency that is most likely to be affected by the announcement. For example, economic news from the United States will normally be marked as USD.
Impact Levels: Red, Orange, Yellow, and White
The Impact column is one of the most important parts of the calendar because it indicates the expected level of market volatility associated with each event.
Forex Factory uses coloured icons to classify the potential impact.
Red Icon: High Impact
A red icon represents a high-impact economic event.
These announcements can cause significant volatility, wider spreads, price gaps, and rapid market movements. Beginner traders should be especially cautious and may prefer to avoid opening new positions during these periods.
Orange Icon: Medium Impact
An orange icon represents a medium-impact event.
These releases may cause a moderate market reaction, although the actual level of volatility depends on how much the result differs from market expectations.
Yellow Icon: Low Impact
A yellow icon represents a low-impact event.
These announcements usually have a limited effect on price, although they may still influence the market under certain conditions.
White Icon: Non-Economic Event
A white icon generally represents a non-economic event, such as a bank holiday.
Bank holidays may not directly move the market, but they can reduce liquidity and trading volume, which may affect spreads and price behaviour.
What Do Actual, Forecast, and Previous Mean?
The calendar displays three key figures that traders use when analysing economic news.
Previous
The Previous figure is the result reported during the previous release.
It provides a reference point for comparing the latest data with earlier economic performance.
Forecast
The Forecast figure is the market consensus or the result that economists and analysts expect to be announced.
Market prices may already reflect this expectation before the data is released.
Actual
The Actual figure is the official result released at the scheduled announcement time.
Traders compare the Actual result with the Forecast and Previous figures to evaluate whether the data is stronger or weaker than expected.
How to Analyse Forex Factory News for Trading
Once traders understand the main components of the Forex Factory calendar, they can use the information to assess potential market reactions.
Comparing the Actual Figure with the Forecast
The most basic method is to compare the newly released Actual figure with the Forecast.
In many cases:
- If the Actual figure is better than the Forecast, the result may be considered positive for the related currency.
- If the Actual figure is worse than the Forecast, the result may be considered negative for the related currency.
However, it is important to understand that “higher” does not always mean “better.”
For some indicators, such as employment growth or GDP, a higher figure may support the currency. For others, such as the unemployment rate or jobless claims, a lower figure may be considered more positive.
The meaning of the result depends on the specific economic indicator.
How Green and Red Figures May Affect a Currency
After a report is released, the Actual figure may appear in green or red.
A green figure generally means the result is considered better than expected according to the interpretation used by Forex Factory. This may increase the probability that the related currency will strengthen.
A red figure generally means the result is considered worse than expected. This may increase the probability that the related currency will weaken.
These colours should not be treated as direct Buy or Sell signals. The market reaction also depends on expectations, positioning, previous revisions, central-bank policy, and broader market sentiment.
Example: Analysing USD News on EUR/USD
Suppose a high-impact USD report is released and the Actual result appears in green, indicating that the data is stronger than expected.
This may support the US dollar and increase the probability that USD will strengthen.
In the EUR/USD currency pair, USD is the Quote Currency. Therefore, if USD strengthens against EUR, the EUR/USD exchange rate may move lower.
On the other hand, if the USD report is weaker than expected and the dollar depreciates, EUR/USD may move higher.
The same principle can also be applied when analysing gold, which is commonly traded as XAU/USD.
When USD strengthens, XAU/USD may face downward pressure. When USD weakens, gold may become more attractive and XAU/USD may move higher.
However, these relationships are not guaranteed because gold is also influenced by interest rates, bond yields, inflation expectations, geopolitical risk, and Safe-Haven demand.
5 Major High-Impact News Events Traders Watch
There are many high-impact economic releases, but the following events are among the most closely monitored by Forex traders.
1. Non-Farm Payrolls
The Non-Farm Payrolls, commonly known as NFP, report measures changes in US employment outside the farming industry and certain other excluded sectors.
It is generally released on the first Friday of each month, although the schedule may occasionally change because of public holidays or other circumstances.
NFP is closely watched because it provides important information about the strength of the US labour market and may influence expectations regarding Federal Reserve policy.
2. Interest Rate Decision
An Interest Rate Decision is an announcement by a central bank regarding whether it will raise, lower, or maintain its benchmark interest rate.
Decisions made by major central banks, particularly the US Federal Reserve, can have a significant effect on currency valuations and long-term market trends.
Traders also closely monitor the accompanying statement, economic projections, and comments from central-bank officials.
3. Consumer Price Index
The Consumer Price Index, or CPI, is a key measure of inflation.
It tracks changes in the prices consumers pay for a basket of goods and services.
Higher-than-expected inflation may increase expectations that a central bank will maintain higher interest rates or tighten monetary policy. However, the market reaction depends on the broader economic environment and current central-bank expectations.
4. Gross Domestic Product
Gross Domestic Product, or GDP, measures the overall value of goods and services produced within a country.
Strong GDP growth may indicate that the economy is expanding, which can be positive for the currency.
Weak or negative growth may raise concerns about an economic slowdown or recession.
5. FOMC Statement
The Federal Open Market Committee Statement, or FOMC Statement, provides information about the Federal Reserve’s monetary-policy decisions and its assessment of the US economy.
Traders analyse the wording of the statement to determine whether the Fed has adopted a more Hawkish or Dovish outlook.
A Hawkish tone may support the US dollar because it suggests tighter monetary policy or higher interest rates. A Dovish tone may weaken the dollar because it suggests easier policy or potential rate cuts.
Frequently Asked Questions
Do Traders Need to Trade Every Economic News Release?
No.
Trading every news release is not necessary, particularly during high-impact announcements when volatility can become extremely intense.
Trading directly during major news releases involves significant risks, including Slippage, Spread Widening, rapid reversals, delayed execution, and Stop Loss orders being filled at a different price from the requested level.
Some traders avoid the market before and after high-impact events. Others use specialised short-term news-trading strategies, but these approaches require experience and strict risk management.
Why Does Price Sometimes Fall Even When the Actual Figure Is Green?
This can happen for several reasons.
The market may have already priced in the positive result before the announcement. This situation is often described as “Buy the Rumour, Sell the Fact.”
Another economic event, central-bank comment, or geopolitical development may also have a stronger effect on the market at that moment.
In addition, the Actual figure may be better than the Forecast but weaker than the Previous result. Earlier figures may also be revised, causing traders to interpret the overall report differently.
Market positioning is another important factor. If many traders were already expecting an extremely positive result, a merely good result may still disappoint the market.
Does Forex Factory Have an Official Mobile Application?
Forex Factory has traditionally been accessed through its website, including through mobile browsers.
Because the availability of official applications may change, traders should verify any application carefully and confirm that it is published or officially endorsed by Forex Factory before installing it.
The mobile version of the website can still be used to access the economic calendar and review upcoming announcements.
Conclusion
Using the Forex Factory Economic Calendar is not as difficult as it may initially appear.
Once traders understand the Impact colours and the three key figures—Actual, Forecast, and Previous—they can begin evaluating how economic data may affect currencies and other financial instruments.
Regularly checking Forex Factory can help traders prepare for periods of high volatility, avoid unexpected economic events, and create a more structured Trading Plan.
However, economic data should not be used as a standalone trading signal. Combining Fundamental Analysis with Technical Analysis, Market Structure, and effective Risk Management can help traders make more disciplined decisions in the highly volatile Forex market.
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