Forex Factory, launched in 2004 by Fair Economy, Inc., has been a popular interface among traders of all levels for its reliability and accessibility. It serves as a hub where traders can access real-time data and connect with each other. Forex Factory has various beneficial features that help traders stay updated with the latest market news. This article dives deep into what Forex Factory offers, how to use it, its advantages and disadvantages, and the reliability of its ratings and data.
What is Forex Factory?
Forex Factory is an online platform specially designed for forex traders. This website is a combination of a market news aggregator, economic calendar, live trade data provider, and an online community of like-minded people. It’s the best place for forex traders who want to stay connected and informed about the forex market’s movements.
Forex Factory’s website is organized into multiple sections, each serving a unique purpose, we will take a look at each one separately. However, the economic calendar of the Forex Factory deserves most of our attention since it’s the most popular feature of this website.
How Does the Forex Factory Calendar Work?
The Economic Calendar on Forex Factory provides a schedule of upcoming economic events, data releases, and announcements, along with past events and their impacts on the market. It serves as a vital tool for traders to stay informed about global financial events that could influence market movements. Users can filter the calendar to view specific events based on their preferences, such as country, type of event, or impact level. By analyzing past events, traders can assess how previous news releases have affected the market and use this data to make informed decisions. The calendar allows traders to plan their trades around significant economic announcements, such as interest rate decisions, GDP releases, and employment reports. This helps minimize risk and capitalize on potential market opportunities. The Forex Factory calendar is widely used to track key economic developments and their potential market impact.
Is Forex Factory Just an Economic Calendar?
As shown in the picture, the interface can be a little complicated for first-time visitors. Using Forex Factory effectively requires an understanding of its main features and benefiting from them according to your trading needs.
Before diving into the features, it is important to mention that while Forex Factory is accessible without an account, creating one allows you to participate in forums, customize your economic calendar, and access personalized trade tracking.
The first section of this website is the Forums and it’s a place where traders from around the world share insights, discuss trading strategies, and talk about past trading experiences. There are different discussions and forums with the date and time it was published or last edited. Once you are signed in you can join the forums, reply or quote posts, or even start discussions yourself.
The second section is the Trades, this tab allows traders to share their trades in real-time, providing an opportunity to learn and compare strategies with others.
The News tab is responsible for collecting forex-related news from trusted sources and updating them regularly. With this feature, traders don’t miss on global financial news and make better decisions accordingly. After signing up you can subscribe to the news channels and post comments as well.
The next section is the Calendar. As mentioned before, the economic calendar of Forex Factory is one of its most prominent features because it tracks global economic events that can impact currency pairs, including interest rate announcements, employment data releases, and GDP reports. In the upcoming paragraphs, read more on customizing the economic calendar of Forex Factory.
The fifth tab is the Market, this section provides live charts, trading positions, performance, and sentiment indicators for each instrument. There is also a tab that shows recent news on that specific instrument. It’s a valuable tool for those who want to ascertain the overall market mood.
The last tab on the Forex Factory is the Brokers, In this section, traders can find detailed information about various brokers that are active in the foreign exchange market. It’s an easy way to compare and evaluate different brokers based on several key features. However, the list is limited to a few brokers perhaps for their popularity and advertisement purposes.
How to Use Forex Factory Calendar?
Forex Factory's economic calendar is a great tool for traders to evaluate upcoming financial events and anticipate market movement to better manage their trades. To make the most of the Forex Factory economic calendar and apply it effectively we have made a step-by-step guide to make it easier.
1. Access the Forex Factory Economic Calendar
To access the calendar, visit the Forex Factory website and click on the “Calendar” tab. This takes you to a page displaying upcoming economic events, their timing, and impact levels.
2. Set Your Time Zone to Your Local Time
Before diving into the events, make sure to set the calendar to your local time zone or the one you’re are following up with. This ensures that event timings match your trading schedule. To change the time zone:
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Click the small clock icon on the top-right of the page.
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Choose your time zone from the list.
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Confirm your selection so the calendar reflects events in your chosen time.
3. Filter the Events
Forex Factory Economic Calendar tracks a wide range of economic events across multiple countries so the primary information can be overwhelming, it’s better to customize the calendar to display the events related to you. For example, if you trade a specific currency pair, you can filter events by currency, such as filtering for EUR/USD will only display events relevant to the Euro and U.S. dollar. You can also filter by event type, for instance, filtering by central bank meetings, inflation data, or employment reports. Events are color-coded by impact level, yellow means low impact, orange means medium impact, and red shows high impact. Events in the red color are more likely to cause significant price movements, so if you want to focus on events based on their impact level, red and orange will be your guide.
To adjust filters, click on the “Filter” icon near the top-right corner of the calendar. Once you have made the selections, click on “Apply Filter”.
4. Understand Event Details
All the events listed in the Forex Factory economic calendar have detailed information that explains their potential impact. This information includes event name, time, impact level, and actual, forecast and previous values. You can click the event name to read a description and understand why it may affect the forex market. The calendar shows three columns, the forecasted value, the previous value, and the actual value when the event occurs. Differences between the forecast and actual values often lead to market volatility.
5. Analyze Economic Events
Compare forecast vs actual results with each other, for instance, if the U.S. unemployment rate comes lower than expected, it might indicate economic strength and appreciation to the U.S. dollar. Clicking on an event opens a detailed tab with a description and historical chart, showing how similar releases have impacted the market in the past. Analyzing past reactions of the market to the events can help you better anticipate future price movements.
6. Plan Trades Around Events
You can plan your trades according to these events based on your trading style and risk management. Some traders prefer to avoid trading during high-impact events like central bank meetings or CPI reports, due to the risk of sudden price spike and increased volatility.
Usually, traders who are experienced with news trading prefer to capitalize on volatility by entering trades based on forecasted versus actual results. However, news trading is very risky and can lead to large losses if not managed carefully.
7. Evaluate End Results
As events happen, the calendar regularly updates itself with actual data for each release. These results can affect your open positions and shape your future trades.
8. Review Historical Data
Forex Factory's economic calendar stores historical data, so traders can analyze how certain events impacted the market in the past. This is useful for back-testing trading strategies and finding how specific releases might influence certain currency pairs.
What Time Does Forex Factory Use?
Forex Factory does not use a specific time, it has data for different time zones and regions. Economic Calendar Forex factory automatically shows the data for the time zone of your device or your country based on your IP address, however, countries with multiple time zones will be displayed as the primary time zone of that country. Users can also change the time from the clock symbol on the right side of their page and change it to the country they want to examine. After selecting the time zone the events will be shown in color-coded impact levels. users can click on any event and read more detailed information about it. Although this information is beneficial, but for traders to completely rely on it is not advisable.
Advantages of using the Forex Factory Website
Forex Factory has several benefits that make it popular among traders, but it’s worth mentioning that it has a set of setbacks users should consider before completely relying on it. Let’s first look at the advantages.
Each tab of the Forex Factory offers a unique service. For example, the economic calendar is one of the most comprehensive in the industry, with detailed event descriptions, impact levels, and accurate timing. All traders, especially those who rely on fundamental analysis, consider this calendar their go-to tool.
New traders who look for a community to learn from, find the forums and the trade tab helpful. Since the forums allow them to enter an active community of traders sharing their experiences from all levels, additionally, the trade explorer tab promotes transparency, enabling traders to share and analyze each other’s performances.
Forex Factory's new updates are also advantageous for traders because this aggregator provides the latest news updates on events that may impact the forex market. With the help of sentiment indicators, traders can see the market’s overall conditions and positioning as well.
Despite its benefits, Forex Factory has some drawbacks. For instance, the forums can be overwhelming sometimes, especially for new traders because of the extra amount of opinions and pieces of information that may be conflicting with each other. This way it’s quite difficult to identify reliable strategies and advice. The color-coded impacts are also not always 100% accurate due to the dynamic nature of fundamental analysis, sometimes an event marked as medium impact could lead to significant market volatility, catching novice traders off guard. In addition to these, showing overall market sentiments could encourage to follow the majority which can lead to “herd mentality bias” and push traders to panic buying and selling resulting to create financial bubbles.
Traders need to approach the platform with caution and evaluate the information they find, so they can avoid making decisions based solely on the opinions of others or surface-level data.
