Forex Factory: A Complete Guide For Your Future Trading

In the vast world of foreign exchange (Forex) trading, knowledge is power. And… When it comes to staying informed, making wise trading decisions, and navigating the intricate web of global markets, Forex Factory stands as an indispensable beacon of light for traders worldwide.

Founded in 2004, Forex Factory is not just any website; it’s a dynamic hub that offers a wealth of resources, market insights, and tools for independent traders like you.

If you’re a trader, it’s like having a trusty sidekick at your side 24/7, assisting you in making the right moves at the right times.

Imagine having a magical crystal ball that could predict when market-altering events would happen when prices would spike or plummet, and when it’s time to sit back and relax.

Well, that’s Forex Factory in a nutshell, and in this comprehensive guide, we’ll embark on a journey to uncover all the hidden treasures this digital powerhouse has to offer.

From Forex Factory economic calendars and breaking news to fundamental analysis, market charts, and regulated brokers, we’ll leave no stone unturned.

So, fasten your seatbelts, traders, because we’re about to embark on a thrilling exploration of Forex Factory’s rich ecosystem.

Chapter 1: The Economic Calendar – Your Roadmap To Trading Success

Picture this: you’re on a road trip, and you need a reliable GPS to guide you through unfamiliar terrain.

In the world of Forex trading, the Economic Forex Factory Calendar from Forex Factory serves as your trusty navigator.

This feature is the heart and soul of the platform and for a good reason.

Market prices often dance to the tune of economic news announcements, particularly in shorter time frames.

The key to success? Knowing the schedule of these announcements in advance.

So, why is the Forex Factory Economic Calendar the go-to choice for traders worldwide?

It’s simple – it’s not just informative; it’s beautifully presented, user-friendly, and packed with valuable data that can make or break your trades.

Why It’s Useful:

Imagine you’re about to navigate a treacherous river in a small boat.

Knowing the tide schedule can be a lifesaver.

Similarly, the Economic Calendar provides you with a schedule of economic events that can impact market prices significantly.

By being aware of these events ahead of time, you gain the power to adjust your trading strategy accordingly.

You can prepare for increased price volatility or choose to stay out of the market during these turbulent periods.

How To Use It:

At its core, the calendar emphasizes the periods when potentially market-moving events are planned to happen.

It’s like a treasure map, and here’s what it tells you:

• Date and Time: This tells you when the scheduled event will take place.
• Currency: It indicates which currency pairs are typically affected by the event.

But wait, there’s more!

If economic data is released during an event, the calendar goes the extra mile by displaying:

• Previous Release Number (‘Previous’): This shows you the previous data point.
• Forecast Number for This Release (‘Forecast’): This is where the experts predict the data point will land.
• Actual Release Number (‘Actual’): When the data is out, this is where you’ll find the actual number.
• But here’s the magic: each event is color-coded based on its typical impact on the market. The red, yellow, and orange Forex Factory icons demonstrate events with high, medium, and low impacts on market prices, respectively. The white icon is like a signal for a bank holiday – time to rest.
• Now, here’s a golden rule: pay special attention to the red and orange events. These are the periods with a moderately high chance of inflated price volatility along with wider spreads. If you’re a technical trader, you might want to steer clear during these times, as technical analysis can often lose its shine when the market is driven by fundamental forces.

Here’s a trading secret: avoid trading a few hours before, during, and after the scheduled event.

This gives the market time to “calm down” and return to more normal price behavior.

But what if you’re into fundamental analysis?

No worries!

Click on the folder icon to unearth the event’s details and a record of past data releases.

Want to take it a step further?

Click on the graph icon, and you’ll have a chart of previous data releases at your fingertips.

With this chart, you can spot economic data trends, helping you make informed trading decisions.

For example, if you see that UK GDP numbers have been on a downward spiral, it might be a good idea to favor short positions over long positions on the GBP.

As you can see, the calendar is like a treasure trove of information for traders.

To use it to its full potential, though, you need to set your time zone. Don’t worry; it’s as easy as flipping a switch.

Setting Your Time Zone

At the top-right corner of the Forex Factory website, click on the time. You’ll be whisked away to a page where you can configure the following settings:

• Time Zone: Select your time zone.
• DST (Daylight Savings Time): Choose to have Daylight Savings Time ‘On’ or ‘Off’.
• Time Format: Decide if you want the time displayed in am/pm or in 24-hour format.
• Don’t forget to click ‘Save Settings’ when you’re done. From that moment on, the calendar will be your local time’s faithful companion. Just remember that this time zone setting may reset when you clear your browser cache.

Set Calendar Filters

The next step is to tailor the calendar to your needs.

You don’t want to be overwhelmed with information, right? You want the critical events, and that’s it. Here’s how to do it:

• Go to the Calendar section.
• Click the filter icon.
• Check the boxes as shown in the image, and click ‘Apply Filter’.

Voila!

Your calendar is now your customized trading assistant, showing only the most important economic events that matter to Forex traders.

Chapter 2: Breaking News – Stay in The Loop, Always!

Imagine you’re in a thrilling action movie, and suddenly, a plot twist occurs. You need to know what’s happening in real-time to make the right decisions.

Well, in the world of Forex, plot twists happen all the time, and Forex Factory’s ‘Breaking News’ feature is your ticket to staying updated on political and economic developments worldwide.

This feature is your financial news anchor, ready to inform you of unexpected market moves even when there’s no scheduled economic event in sight.

These price swings are often the result of unforeseen events that catch everyone off guard.

Forex Factory’s ‘Breaking News’ feature aims to keep you in the know, and it does so with remarkable speed, ensuring you’re informed just minutes after an event occurs.

To enable this feature, it’s as simple as a few clicks:

• Click the ‘News’ header at the top.
• Click on the ‘News / Latest Stories’ heading to open the options panel.
• In the options panel, check the options as shown, and click ‘Apply Settings’.

Now you have a page dedicated to displaying the latest updates from various sources.

And here’s a little bonus: it’s color-coded, just like the economic calendar. Yellow, orange, and red icons represent low, medium, and high-impact Forex news, respectively. It’s like having a radar for market-changing events.

As a seasoned trader, I personally keep this page open on my trading desktop at all times. 

Why?

Because I never want to miss out on what’s happening in the market.

Forex Factory’s ‘Breaking News’ feature is my trusty sidekick, always ready to give me the latest scoop.

Chapter 3: Fundamental Analysis – Master The Art of Market Understanding

In the intricate world of Forex trading, knowledge isn’t just power; it’s the essence of success.

Enter Forex Factory’s ‘Fundamental Analysis’ feature, a constantly updated collection of articles and reports that provide you with insights into the fundamental forces shaping the market.

But hold on, you might wonder how to access this goldmine of information. It’s a breeze, and it follows the same steps as enabling the ‘Breaking News’ feature, with one small twist.

Instead of checking ‘Breaking News,’ this time, you check ‘Fundamental Analysis.’

It’s like opening a treasure chest filled with in-depth analysis and expert opinions.

Now, when you’re on your dashboard, you’ll have both ‘Fundamental Analysis’ and ‘Breaking News’ side by side. This is where you become a master of market understanding.

Every few hours, check in to see if there are any new developments that could impact your trading strategy. These features are particularly helpful for active day traders and scalpers who need to stay up to speed with the latest global happenings.

Chapter 4: Market Charts – Unveil The Market’s Deepest Secrets

Imagine having a magic mirror that could reveal the deepest desires of your heart. Well, Forex Factory’s ‘Market Charts’ feature is your magic mirror into the Forex market’s inner workings.

Found on the ‘Market’ page, this tool isn’t just your ordinary price chart; it’s a window into the soul of the market.

What sets Forex Factory apart is its ability to append high-impact events to the price chart.

With this chart, you can see not only price movements but also how the market reacts to significant events.

It’s like being able to read the market’s thoughts and feelings.

This simple feature is packed with insights:

What issues is the Forex market most concerned about?

How does the market feel about a particular event?

By observing how prices react to each event, you can gain a deeper understanding of the market’s opinions and expectations. This knowledge is invaluable when making trading decisions.

But there’s more! The ‘Market’ page also offers a graphical representation of each trading session in your local time.

This handy widget shows you how far into the current trading session you are, when the session closes, and when the next one begins.

It’s like having a clock that tells you when to be vigilant and when to take a break.

Chapter 5: Trade Explorer – Your Trading Journal on Autopilot

Imagine having a personal assistant who records every detail of your trades, calculates your trading statistics, and even marks your trades on a price chart.

Well, you don’t need to imagine it because Forex Factory’s ‘Trade Explorer’ does exactly that!

This invaluable tool is a dream come true for retail traders.

It does the heavy lifting for you, automatically documenting the nitty-gritty details of your trades, from entry and exit points to profit and loss figures.

It’s like having a personal trading journal that automates the tracking and recording of your trades.

To Use The ‘Trade Explorer,’ Follow These Steps:

• Click on the ‘Trades’ heading.
• Scroll down to the Trade Explorer section.
• Click the ‘Create a Trade Explorer’ link.

Follow the instructions on the next page, and in no time, your Trade Explorer will be up and running, diligently documenting your trading journey.

Pro tip: use the Trade Explorer in conjunction with the ‘Trading Journal’ section in the ForexFactory forums for a comprehensive trading record that can help you grow as a trader.

Chapter 6: Sentiment Indicator – The Trader’s Crystal Ball

Imagine having a crystal ball that reveals what other traders are thinking and doing.

Well, Forex Factory’s Sentiment Indicator isn’t quite a crystal ball, but it’s the closest thing you’ll get.

This nifty tool tallies the trade positions of all Trade Explorer users and displays the percentage of traders who are long and short on each currency pair.

Here’s the magic of the Sentiment Indicator: it can be a valuable contrarian indicator.

Since most retail traders tend to lose money, their collective sentiment can be a powerful signal.

But don’t be fooled; this isn’t a foolproof strategy.

For best results, pay attention to the Sentiment Indicator when the percentage is below 40% or above 60%. The larger the sentiment imbalance, the better it serves as a contrarian indicator.

However, never use it as a sole trade signal. Think of it as another tool in your trading toolkit, not a crystal ball that predicts the future.

Accessing the Sentiment Indicator is a breeze.

Click on the ‘Trades’ heading, scroll down, and there it is, ready to provide you with insights into the collective trader sentiment.

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Chapter 7: Forex Factory Forums – The Meeting Place of Traders

Now, let’s venture into the vibrant and bustling heart of Forex Factory – the forums.

Every day, hundreds of traders gather here to discuss and debate virtually every aspect of trading. Systems, strategies, broker discussions, trade journals – you name it, and you’ll find it.

But here’s a word of caution: while forums can be a goldmine of information and insights, they can also be a minefield of misinformation.

It’s a place where profitable traders and well-intentioned novices share their wisdom, but it’s also where the less successful sometimes preach untested strategies.

So, how should you approach the forums?

With a pinch of salt, my friend. Take everything you read with a grain of skepticism, and always cross-check information.

However, don’t despair; there are gems of wisdom hidden amidst the noise.

Occasionally, you’ll stumble upon knowledgeable and experienced traders who share enlightening advice.

When you encounter such a treasure, subscribe to that forum member.

This way, you can easily access all their future posts and replies. It’s like having a mentor at your fingertips.

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Chapter 8: Regulated Brokers – Your Safety Net in The Forex Jungle

In the wild space of Forex trading, where futures might be created or lost in the blink of an eye, one thing stands between you and disaster – a regulated broker.

Forex Factory recognizes the importance of choosing the right broker and provides a list of Forex brokers regulated by reputable financial authorities.

This feature is a lifesaver for new traders embarking on their Forex journey.

Instead of spending countless hours researching potential brokers, you can simply refer to this list.

After all, you should only entrust your hard-earned money to brokers regulated in countries with robust financial laws that protect retail traders like you and me.

Ensure your chosen broker is regulated by one of these institutions:

• Australia: ASIC
• Germany: BaFin
• United States: CFTC/NFA
• United Kingdom: FCA
• Switzerland: FINMA
• New Zealand: FMA
• Canada: IIROC
• Japan: JFSA
• Singapore: MAS
• Hong Kong: SFC

Trading with a regulated broker is crucial because it minimizes the risk of unethical or unfair brokerage practices.

Brokers, driven by profit motives, may bend the rules, but financial regulators like the ones listed here impose strict laws to protect retail traders.

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Chapter 9: Summary – Your Trading Arsenal Unveiled

In the grand tapestry of Forex trading, Forex Factory is the thread that weaves together knowledge, insight, and opportunity. Let’s recap all the treasures you’ve uncovered.

(a) Economic Calendar: Your roadmap to trading success, providing schedules, data, and insights.

(b) Breaking News: Your real-time market news anchor, keeping you updated on unexpected events.

(c) Fundamental Analysis: Your window into the fundamental forces shaping the market.

(d) Market Charts: Your mirror reflects the market’s thoughts and feelings.

(e) Trade Explorer: Your trading journal on autopilot, recording and analyzing your trades.

(f) Sentiment Indicator: Your trader’s crystal ball, revealing collective trader sentiment.

(g) Forex Factory Forums: Your meeting place with fellow traders, but approach with caution.

(h) Regulated Brokers: Your safety net in the Forex jungle, ensuring a fair trading environment.

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FAQs (Frequently Asked Questions)

Now it’s time to check out some common questions that you might have in your mind. This will give you a better understanding of Forex Factory.

Q1: How To Read Forex Factory?

To read Forex Factory:

• Check the economic calendar for important events.
• Review forum discussions for trading insights.
• Stay updated on market news.
• Customize settings for your preferences.
• Always verify information independently.

Q2: How To Trade Forex Factory News?

To trade Forex Factory news:

• Monitor the economic calendar for key events.
• Identify potential market-moving news (red or orange impact).
• Plan trades ahead of time based on event outcomes.
• Set entry and exit points with risk management.
• Execute trades cautiously during news releases.

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To Conclude

With this arsenal of tools and knowledge, you’re equipped to navigate the challenging waters of Forex trading. Remember, Forex Factory is more than just a website; it’s your companion, mentor, and ally in your quest for trading success.

So, fellow trader, go forth with confidence, explore the depths of Forex Factory, and may your trades be ever in your favor. Happy trading!

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