Economic events drive currency markets. Interest rate decisions, employment reports, inflation data—these releases cause the volatility that traders either profit from or get destroyed by. The Forex Factory Economic Calendar has become the standard tool for forex traders to track these market-moving events.
What Is the Forex Factory Calendar
Forex Factory is a platform founded in 2004 that provides comprehensive economic data specifically for forex traders. Its Economic Calendar is widely considered the best free tool for tracking upcoming economic releases, central bank meetings, and other events that move currency markets.
The calendar displays hundreds of economic events per week, covering:
- All major economies (US, Eurozone, UK, Japan, Canada, Australia, Switzerland, New Zealand)
- Minor and emerging market economies that affect currency flows
- Central bank meetings and policy decisions
- Employment data, inflation reports, GDP releases
- Consumer and business confidence surveys
- Speeches by central bankers and government officials
Key Features of the Calendar
Real-Time Updates
Data appears the moment it's released. You don't wait for news sites to write articles or analysts to publish summaries—you see the number as soon as the public sees it. This speed matters when trading volatile news events.
Three-Number Display
For each event, the calendar shows three critical numbers:
Previous: What the number was last time Forecast: What economists expect this time (consensus estimate from major banks and institutions) Actual: What the number actually is (blank until release, then populated instantly)
This three-number display is crucial because markets move on the difference between forecast and actual, not on the absolute number itself.
Impact Indicators
Each event is color-coded by expected market volatility:
Red (High impact): Major market-moving events
- Non-Farm Payrolls (NFP)
- Consumer Price Index (CPI)
- Central bank rate decisions (FOMC, ECB, BoE, BoJ)
- GDP releases
Orange (Medium impact): Important but less volatile
- Retail sales
- Trade balance
- Manufacturing PMI
- Consumer confidence
Yellow (Low impact): Minor events
- Minor economic surveys
- Secondary indicators
Focus your attention on red and orange events. Yellow events rarely generate tradeable moves and mostly represent noise.
Historical Data
You can see how each currency pair reacted to previous releases of the same indicator. This helps you understand which events actually move markets and which are overhyped. Some indicators consistently cause 100+ pip moves, while others barely register despite being labeled "high impact."
Customizable Filters
The calendar offers powerful filtering options:
Currency filter: Show only events for specific currencies. If you trade EUR/USD and GBP/USD, filter to show only USD, EUR, and GBP events to eliminate noise from currencies you don't trade.
Impact filter: Check "High" and "Medium" impact events, uncheck "Low" impact. This focuses your attention on tradeable events.
Timeframe filter: Show today only, this week, or next week. Most traders check the calendar daily for today's events and weekly for upcoming major releases.
Setting Up Your Calendar
Initial Configuration
When you first visit Forex Factory, the calendar shows everything. That's overwhelming and not useful for actual trading. Here's how to set it up:
Step 1: Set your time zone
Click the time zone display and select your local time. This ensures all event times display correctly for you. There's nothing worse than missing an 8:30 AM release because you thought it was in UTC.
Step 2: Filter by currency
If you trade mostly EUR/USD and GBP/USD, filter to show only USD, EUR, and GBP events. This eliminates noise from currencies you don't trade and reduces the calendar to manageable information.
Step 3: Filter by impact
Check "High" and "Medium" impact events. Uncheck "Low" impact. Most low-impact events don't generate tradeable moves.
Step 4: Verify sorting
Ensure events are sorted by time, with upcoming events at the top. The calendar should show today's events first, then this week's remaining events.
Now you have a clean, focused calendar showing only what matters to your trading.
Reading Calendar Entries
Let's break down a typical calendar entry:
Event: US Non-Farm Payrolls Time: 8:30 AM (your time zone) Currency: USD (affects all USD pairs: EUR/USD, GBP/USD, USD/JPY) Previous: +200K Forecast: +215K Actual: (blank until release) Impact: Red (high)
Interpretation:
- Last month, the US added 200,000 jobs
- Economists expect this month to show 215,000 jobs added
- The market has priced in +215K
- At 8:30 AM, we get the actual number
- If actual >> forecast (say +300K), USD should strengthen
- If actual << forecast (say +100K), USD should weaken
The magnitude of the move depends on the size of the surprise. Small deviations cause small moves. Large surprises cause large moves.
Understanding Economic Indicators
Non-Farm Payrolls (NFP)
What it is: Monthly report measuring US job growth (excluding farming jobs). Released first Friday of every month at 8:30 AM ET.
Why it matters: The Federal Reserve watches employment closely when deciding on interest rates. Strong jobs = strong economy = potential rate hikes = stronger USD. Weak jobs = weak economy = potential rate cuts = weaker USD.
How to trade it:
Wait-and-see approach (recommended for most traders):
- Stay flat before 8:30 AM—close all USD positions
- Watch the release—note the headline number, revisions to previous months, and the unemployment rate
- Wait 15-30 minutes—let the initial spike and reversal play out
- Assess the trend—which way is price moving now?
- Enter on pullback in the direction of the trend
Example: NFP comes in at +300K vs +200K forecast. Much stronger than expected. EUR/USD initially spikes down to 1.0780 from 1.0850, then bounces to 1.0820. Over the next 30 minutes, it slowly trends down to 1.0800. You wait for a pullback to 1.0815 and enter short with a stop above 1.0840, targeting 1.0750.
Central Bank Interest Rate Decisions
When the Federal Reserve (FOMC), ECB, Bank of England, or Bank of Japan announce rate decisions, currencies move. But the real action is often in the statement and press conference that follow.
How to trade rate decisions:
Before the decision: Check what the market is pricing in. Most rate decisions are "priced in"—meaning the market expects no change. The question is: what will the central bank say about the future?
The decision itself:
- Unexpected rate hike: That currency strengthens immediately. Enter in the direction of the hike (buy USD if Fed hikes). Stop: 30-50 pips beyond pre-decision price. Target: 100-200 pips depending on the pair.
- Unexpected rate cut: That currency weakens immediately. Enter against the currency (short USD if Fed cuts). Wider stops because moves can be large. Larger targets—rate cuts often start multi-month trends.
- No change as expected: The reaction depends on the statement language.
The statement and press conference: This is where the real information is. Central bankers use coded language.
Hawkish language (supports currency strength):
- "The committee remains concerned about elevated inflation"
- "Further policy tightening may be appropriate"
- "The economy continues to show robust growth"
Dovish language (supports currency weakness):
- "Inflationary pressures have moderated"
- "The committee will remain patient on policy adjustments"
- "Economic activity has softened"
Trading the statement: Sometimes the rate decision is as expected, but the statement is more hawkish or dovish than anticipated. That moves markets.
Example: The Fed keeps rates at 5.25-5.50% as expected. But the statement says "inflation remains elevated and further rate hikes may be necessary." Previously, the Fed said they were "data-dependent." This is more hawkish than before. USD strengthens even though rates didn't change.
Inflation Data (CPI, PPI)
CPI (Consumer Price Index) and PPI (Producer Price Index) measure inflation. These are major market movers because central banks base rate decisions on inflation data.
Why inflation matters:
- High inflation = central bank may raise rates = stronger currency
- Low inflation = central bank may cut rates = weaker currency
Trading CPI releases:
The deviation method:
- Note the forecast (e.g., US CPI expected at 3.2% year-over-year)
- Wait for the actual
- Calculate the deviation (3.6% actual vs 3.2% forecast = +0.4% surprise)
- Assess significance (0.1-0.2% misses cause small moves; 0.3%+ misses cause larger moves)
- Enter in the direction of the surprise (higher inflation = buy currency; lower = sell)
- Wait for confirmation (don't enter in the first 30 seconds)
Example: Eurozone CPI expected at 2.8%, comes in at 2.3%. That's a significant undershot—inflation is cooling faster than expected. The ECB is less likely to raise rates. EUR weakens. EUR/USD drops from 1.0850 to 1.0800 and holds. You enter short on a pullback to 1.0820.
Trading Strategies for Economic Events
Strategy 1: Post-News Trend Following
Best for traders who want to catch sustained moves after economic releases.
How it works:
- Identify high-impact events that consistently move your traded pairs
- Stay flat before the news
- Wait 15-30 minutes after the release
- Identify the trend direction using 15-minute or 1-hour charts
- Enter on pullbacks in the trend direction
- Target 100-200 pip moves for major news (NFP, rate decisions)
Example: NFP comes in much weaker than expected. EUR/USD rallies. You wait 20 minutes, then enter long on a pullback to support. You target a move equal to the average post-NFP range over the past 6 months (let's say 150 pips).
Pros: You're trading with momentum, not against it Cons: You're entering after the initial move, so your risk-reward might be less favorable
Strategy 2: News Reversal (Fade the Spike)
Best for traders who recognize when the market overreacts.
How it works:
- Watch the initial spike after a news release
- Assess whether the data justifies the move
- Look for reversal signals (doji candles, rejection of key levels, volume dropping off)
- Enter against the spike when reversal is confirmed
- Tight stops just beyond the spike extreme
- Quick targets (50-75% of the spike size)
Example: Retail sales come in slightly better than expected (+0.3% vs +0.2% forecast), but EUR/USD spikes 70 pips higher anyway. The data didn't justify that move. 20 minutes later, price forms a doji at the highs and reverses. You short, targeting a 50-pip retracement.
Pros: You're fading overreactions, which can offer excellent risk-reward Cons: Sometimes the spike is just the beginning of a larger trend—your tight stop gets hit
Strategy 3: Pre-News Positioning
Best for traders with strong fundamental views who want to position ahead of major events.
How it works:
- Analyze the upcoming event—what's the consensus view? What's your view?
- If you think the market will be wrong, position accordingly before the news
- Small position sizes (25-50% of normal)
- Wide stops (news can spike against you temporarily)
- Hold through the release (if you're right, the move can be large)
Example: The market expects the ECB to be dovish. But you've analyzed Eurozone data and think inflation is stickier than expected. You buy EUR/USD before the ECB decision. The ECB comes out more hawkish than expected (they mention concerns about inflation). EUR/USD rallies 200 pips.
Pros: You get the full move, not just the aftermath Cons: If you're wrong, the loss can be large. This is advanced trading.
Pre-Event Preparation
The worst time to figure out your trading plan is when the news is hitting. Spreads are widening, liquidity is disappearing, and your brain is trying to process a dozen things at once.
24-48 Hours Before
- Check the calendar for upcoming high-impact events affecting your traded currencies
- Note the timing—when exactly will data drop?
- Understand market expectations—what's priced in? Is the forecast for strong or weak data?
- Review past releases—how did this currency pair react the last 3-4 times this data came out?
Pre-Event Positioning Options
Option 1: Flat before the event
Close all positions 15-30 minutes before high-impact releases.
Pros: No surprise volatility, no blown stops, no slippage Cons: You might miss the move if price runs your direction
Option 2: Reduce position size
If you're confident in your directional view, keep a smaller position (perhaps 25-50% of normal size).
Pros: You participate if you're right, but with limited risk Cons: You can still get stopped out on the initial spike
Option 3: Full position with wide stops
If you're trading the higher-timeframe trend and believe the news will align with that trend, you might hold through the news with a wider-than-normal stop loss.
Pros: You don't get shaken out by noise Cons: If you're wrong, the loss is larger
Recommendation: For most traders, Option 1 (flat) or Option 2 (reduced size) is best. The volatility around major news is often unpredictable—price can spike in both directions before settling in the "true" direction.
During the Release
The First 30 Seconds: Chaos
Don't trade in the first 30 seconds after a high-impact release. Here's what happens:
- Spreads widen from 1 pip to 5-10 pips (or more)
- Liquidity evaporates as market makers pull orders
- Price can spike 50-100 pips on very little volume
- Your stop loss might get slipped 20-30 pips
This is not trading—it's gambling. Stay out.
The First 5 Minutes: Sorting Out
After the initial spike, the market starts digesting the data.
Check three things:
- The deviation: How far is actual from forecast? Small misses (within 10%) cause muted reactions. Huge misses (50%+ away) can cause sustained trend moves.
- The revisions: Sometimes the previous number gets revised. A weak +100K actual looks worse if last month's +200K gets revised down to +150K.
- Market reaction: Which way did price move? Did it hold the direction or reverse?
Example: NFP comes in at +150K, versus forecast of +200K. That's a miss of 50K jobs (25% below expectations). EUR/USD spikes from 1.0850 to 1.0900 (USD weakens). But then, within two minutes, it reverses and drops to 1.0820.
What happened? The initial spike was algorithm trading reacting to the headline miss. Then traders realized that +150K is still decent job growth, and the previous month was revised UP to +250K. The data wasn't as bad as the first reaction suggested. The market corrected itself.
If you bought the initial spike, you got hurt. If you waited 5 minutes to assess, you saw the reversal and could short the rally.
After the Dust Settles
15-30 minutes post-release:
The initial volatility subsides. Spreads return to normal. Liquidity is back. This is when traders who want to trade the news actually enter.
Two approaches:
Approach 1: Trade the trend
If the data was significantly better or worse than expected AND price held its directional move (no false reversal), you can enter in the direction of the move.
Example: CPI comes in much hotter than expected (3.8% vs 3.2% forecast). EUR/USD drops from 1.0850 to 1.0780 and holds there. No reversal. You enter short at 1.0790 with a stop above 1.0850, targeting 1.0700.
Approach 2: Fade the move
If the data wasn't that significant but price overreacted, you can fade (trade against) the initial move.
Example: Retail sales come in slightly better than expected, but EUR/USD spikes 60 pips higher anyway. The data didn't justify that move. If price shows signs of reversal, you can short the overextended move.
Common Mistakes to Avoid
Mistake 1: Trading Every News Event
Not all economic releases are created equal. NFP moves markets 150+ pips consistently. Minor economic surveys might move price 10 pips if you're lucky.
Fix: Focus only on high-impact events. Filter your calendar to show only red (high impact) events. Trade the 5-10 events per month that actually matter, not the 100+ that don't.
Mistake 2: Ignoring the Forecast
The actual number doesn't matter as much as the surprise relative to expectations.
Fix: Always check the forecast before the news. A +200K NFP print is bullish if the forecast was +150K, but bearish if the forecast was +300K. Context is everything.
Mistake 3: Trading the First 30 Seconds
The first 30 seconds after major news are chaos. Spreads widen, liquidity disappears, and price spikes on very little volume.
Fix: Wait at least 5-15 minutes before entering. Let the market sort itself out. You'll get better fills and less slippage.
Mistake 4: No Pre-Defined Plan
Deciding your trade while the news is hitting is a recipe for disaster.
Fix: Before the news, write down your plan:
- If actual > forecast by X amount: I'll do Y
- If actual < forecast by X amount: I'll do Z
- If actual is close to forecast: I'll stay flat
Then execute the plan. Don't improvise while EUR/USD is moving 100 pips per minute.
Mistake 5: Forgetting About Revisions
Often, the previous month's number gets revised. This can be just as market-moving as the new number.
Fix: Always check both the new number AND any revisions to the previous number. A weak print that comes with a downward revision to last month's data is doubly bearish.
Mistake 6: Overleveraging Around News
Volatility around news can trigger stops on both sides. If you're overleveraged, you'll get wiped out.
Fix: Reduce position size around major news. If you normally risk 2% per trade, risk 0.5-1% on news trades. Or stay flat entirely—there's always another trade tomorrow.
Integrating the Calendar into Your Routine
Weekly Routine (Sundays)
Step 1: Review the week ahead
Open the Forex Factory calendar for the upcoming week. Identify:
- Which days have the most high-impact events?
- Which currency pairs are most likely to be affected?
- Are there any conflicting signals (e.g., bullish USD news and bearish USD news in the same week)?
Step 2: Plan your trading week
Based on the calendar, decide:
- Which days you'll trade actively (low news days)
- Which days you'll reduce risk or stay flat (major news days)
- Which events you might want to trade pre-emptively (if you have a strong view)
Step 3: Set alerts
For major events, set price alerts on your traded pairs. You don't need to stare at the calendar—alerts will remind you when volatility is approaching.
Daily Routine (Mornings)
Step 1: Check today's calendar
Filter to show only today's events. Note:
- What time do high-impact events hit?
- Which currencies are affected?
- What are the forecasts?
Step 2: Plan your day
If there are major events (like NFP or FOMC), plan to:
- Reduce position sizes
- Close trades before the event
- Wait for post-event setups
If it's a light news day, you can trade more normally.
Step 3: Monitor during the day
Keep the calendar open (or minimized) while trading. When an event time approaches, double-check your positions. Are you exposed to a currency pair that's about to get volatile? If so, consider reducing risk.
Conclusion
Economic events move markets. You can't ignore them, but you also don't have to fear them.
The Forex Factory Economic Calendar gives you the information advantage that professional traders have had for decades. You know what's coming, when it's coming, and what the market expects. That information, combined with a systematic approach to trading news, transforms volatility from a threat into an opportunity.
The key principles:
- Prepare before the news—know what's coming and have a plan
- Respect the volatility—reduce size or stay flat during major releases
- Wait for confirmation—don't trade the first 30 seconds of chaos
- Trade the trend, not the spike—enter after the dust settles, in the direction of momentum
- Focus on what matters—high-impact events only, not every minor release
- Never forget the forecast—it's the deviation from expectations that moves markets
Economic news isn't random noise—it's the heartbeat of the market. Learning to read that pulse gives you an edge that pure technical analysis can't provide.
Use the Forex Factory calendar as your foundation. Layer in technical analysis, risk management, and your own market experience. That's how you build a sustainable trading business that can weather any market condition.
The calendar is free. The information is there. The only question is: will you use it?
ChartMini integrates with the Forex Factory Economic Calendar, automatically tracking high-impact events for your watched currency pairs and alerting you when major news is approaching so you never get caught off guard by market-moving volatility.