​Forex Trading for Beginner​s > ​Resource​s > ​The Ultimate Guide to Forex Factory

forex factory

The Ultimate Guide
to Forex Factory

Updated for 2020

​What is Forex Factory?

Forex Factory is a free website that provides ​​news, economic data, market analysis, and other services to ​foreign exchange (Forex) traders​.

​Founded in 2004, it's one of the longest-running and most ​popular​ ​​Forex trading ​resources for ​independent traders.

I personally ​have Forex Factory ​on display at all times on my trading desk.

​In this guide, you will learn ​how to use this ​valuable ​website to​ ​help with your trading decisions.


News Calendar

The most popular feature in Forex Factory is its economic ​calendar.

While there are other websites that offer similar calendars, the one at Forex Factory is the most presentable and offers the best user experience.

Why It's Useful

Market prices are often driven by economic news announcements, especially on the ​short term time frames.

​By knowing ​the schedule of these announcements in advance, you can ​adjust your trades​ ​to ​handle ​​increase​d ​price volatility, or to avoid trading during ​these periods altogether.

forex factory calendar

​How To Use​

​At the most basic level, the calendar ​highlights the periods when potentially market-moving events are scheduled to occur.

news events

I​t lists the:

  • ​Date and time of the scheduled event
  • ​Currency that is typically affected by the event

Additionally, if ​economic data is ​released, ​the ​the calendar will also show:

  • ​The previous release number ('Previous')
  • ​The forecast ​number for this release ('Forecast'), and
  • ​The actual release number​ ('Actual')

​​To ​gauge the expected impact ​​on the ​market, each event is ​color-coded based on how much it ​typically ​affects ​the market price.

forex factory news impact

The red, orange ​and yellow Forex Factory icons indicate events with a typically high​,​ medium ​and low impact on market prices respectively. The white icon indicates a bank holiday.

​Most of the time, we should only be concerned with the red and ​orange ​events. These are ​the periods with a relatively high chance of increased price volatility and wider spreads.

If you're a purely technical trader, you might want to avoid trading during these times since technical analysis is ​often ineffective ​during ​​fundamentally-driven ​events like these.

The rule of thumb is to avoid trading a few hours before, during, and a few hours after the scheduled event is over. This gives the market time to "calm down" and revert to more normal ​price behavior.

forex factory calendar impact

​If you consider fundamental analysis in your trading process, you can find out the details of the event by clicking the folder icon:

forex factory calendar details

Here, you​'ll find details of the event, and a record of previous data releases.

One more thing: you can also click on the graph icon to see a chart of previous data releases:

forex factory calendar graph

With this chart, ​we can ​easily detect economic data trends.

For example, we see here that the UK GDP numbers have generally been trending down in recent times. Everything else being equal, therefore, it would ​be a good idea to favor taking a ​short position ​​over​ a long position on the GBP.

As you can see, the calendar feature is full of ​useful information for traders.

To use ​it properly, however, you'll first have to ​set your ​time zone.

Setting Your Time Zone

At the top-right of the Forex Factory website, click on the time: