EditorEditor: Chris CammackUpdated: May 26, 2023

Last Updated On May 26, 2023

Alison Heyerdahl

As a Forex trader, staying informed and making well-timed decisions are vital to a successful trading strategy. Economic calendars are tools traders, investors, and economists use to track and monitor important national and international events and news releases that may impact the financial markets. 

Recurring news events, such as the monthly NFP (Non-Farm Payroll) report, GDP (Gross Domestic Product) reports, inflation rates, central bank announcements, and other key economic indicators have predictable effects on price direction, trading volume and sentiment. 

For Tanzanian traders who trade the USD/TZS, various economic and political factors affect the Tanzanian Shilling’s exchange rate. These include inflation rates, interest rate differentials between the Shilling and US dollar, and global commodity prices. Tanzanian traders would therefore watch out for interest rate announcements from the Bank of Tanzania and the US Federal Reserve, in addition to Tanzanian and US inflation rates.  Traders need to know when these events will occur and be prepared to trade the volatility they create.

FxScouts provides a free real-time Economic Calendar, allowing traders to view the various currencies, the economic events that impact them, the country or region to which the event pertains, and the time and date they occur. It provides a description of each event and a value for the “actual,” “forecasted,” and “previous” periods. 

“Actual” refers to the objective value of the data released in the news announcement; the “forecasted” number represents the predicted value before the actual data was released, and the “previous” number refers to the value of the last data release event. This calendar also provides a brief background on each event and a chart illustrating previous values. Bookmark this page and use it to plan your trading sessions.

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 planned meetings and data releases will be in an economic calendar, keeping abreast of other news that may affect the fundamentals of the currencies you trade is essential. 

How to Use an Economic Calendar

  • Choose a Reliable Economic Calendar: Ensure the calendar provides accurate and timely information, with customisable settings based on your time zone and preferred currencies.
  • Review the Calendar Regularly: Review your calendar daily so you can anticipate potential market volatility.
  • 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 Tanzania will be colour-coded in red, because it will have a significant impact on the price of the USD/TZS.
  • 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 USD/TZS less than increasing unemployment in Tanzania.
  • Inform your Trading Strategy: Use the economic calendar to plan your trades and align them with significant upcoming events.
  • 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.
  • 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. 
  • 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.

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