Trade The Journey

Trade The Journey

Economic Calendars

In the midst of choices in regards to the financial market available, you can find yourself overwhelmed. Should I invest in stocks and what about options? Bonds are also available. For some reason, Bonds are still hard for me to grasp. When Interest rates go up, bond prices go down and vice versa? So, if the bond prices are going down, then the yield must go up in order to compensate for the coupon and me receiving the principal in full. This is me thinking out loud.

Options have quite a learning curve as well. Options in its very nature require you to go a step further than investing because you have to have a good eye for seeing what direction the underlying asset will head. So you buy a call or sell a call, or maybe you should buy a put and sell a put at the same time. The basic mechanics for buying options are that calls are for bullish sentiment and puts are for bearish sentiment. And for selling options they are the exact opposite. The purpose for buying calls and puts is to speculate on if the underlying asset will rise or fall. And for selling calls and puts its the exact opposite, you hope to profit by someones incorrect expectations.

For the experienced, there are much more to options than that.

I, however, am finding my way in currency trading also known as trading in the forex. It is a 24hr market known for its liquidity and the ability of the investor/trader to use leverage as a part of their purchasing power. This is what initially drew me to the options market, the ability to leverage. Leverage is naturally built into these markets, which is quite unlike the stock market.

Currency trading is more about the broader view of the economy and its direction rather than specific assets like stocks, bonds, etc. You only have to be concerned with the major events, like economic and political.

One of the tools the currency trader needs to have is an economic calendar. An economic calendar is a calendar tracking all the major releases of government and economic data, all over the world.

Here is some of the calendar information:

  • Consumer Price Index
  • Industrial Production
  • MBA Mortgage Applications
  • Machinery Orders
  • Producer Price Index

These are some of the calendar events that the investor/trader has to be aware of when buying and selling currency. In most markets, you can be somewhat aware of the economic events and do quite well, as long as you understand the stock. However, in the currency market, you have to be aware of the events listed above and much more to keep track of the different countries progress and declines. Each country releases their information and each countries currency can fluctuate because of this.

Currency is quite different from selling stock, in that with a stock you buy at one moment and sell the future at a profit. In currency trading, you are simultaneously buying and selling one currency against another. Think of it as visiting another country and exchanging your dollars for the currency of the country you are visiting.

Economic Calendars are available on a number of different apps on your phone. If you type in Economic Calendars in your phone’s app store, you will see a list options available to you. Each day the calendar will send you alerts regarding different countries release of data pertaining to their economic health.

Even if you don’t plan on trading in the currency market, being aware of the different events happening in other countries can be both exciting and informative. You might spot an opportunity to invest that others may not know exist until it is too late.

Leave a Comment

Your email address will not be published. Required fields are marked *