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Check the economic calendar before you open a trade rather than after you were stopped out.
By Tom Long | October 30, 2007
It happens almost every time the market reacts to a scheduled news release. New traders get caught off guard as they are unaware of what is coming. Since I work with new traders as an instructor of the FX Power Courses offered by FXCM, I always get emails from a few new traders asking why the market moved so much in such a short period of time. I usually refer them to the economic calendar at DailyFX (http://www.dailyfx.com/calendar/) and to the commentary offered by the analysts at that website. Did you know that the US Federal Open Market Committee was meeting Wednesday, October 31st and will release a statement on US interest rates at 2:15PM Eastern? Did you realize that another major release was taking place this Friday, November 2nd at 830AM Eastern? This is when the US Department of Labor will release the Nonfarm Payrolls. These two events may be the biggest two movers of the world’s financial markets and will have a big impact on any open trades. You can find much more at DailyFX, including some recommendations on how to trade these events. This is much better than not realizing what is happening and watching in horror as your profitable trade turns into a big loser in a matter of a couple of minutes. If you are trading, you should make it a habit to check the economic calendar at the beginning of every week to make sure you are aware of what is about to be released. Being prepared for volatility is always better than being surprised by it. You may not be able to profit by the big moves, but you sure can protect yourself from big losses, and that may be more important to your success as a trader.
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