Economic news is one of the most powerful forces in trading. This guide covers the key concepts you need to understand how news moves markets - and how to prepare for it.
Concept 01 — What drives market activity?
Markets don't move randomly. Six key factors shape when and how prices move:
Trading hours - Crypto: 24/7 | FX: 24/5 | Stocks: exchange timetable
Holidays - always check the trading calendar for each venue
Local regulations - asset restrictions vary by country
Political events - elections, referendums (e.g. Brexit)
Industry events - IPOs, crypto forks, mergers
Economic news - planned data releases (main focus of this guide)
Concept 02 — What is economic news?
Economic news (also known as news announcements) are scheduled events when government statistical bodies publish data about a country's economy. Both institutional and retail traders watch these releases closely. Decisions to buy or sell are made based on the numbers published. The timing of most releases is known weeks or months in advance.
Concept 03 — What happens during announcements?
News releases cause three things to happen at once. More traders go online - this leads to higher server load and possible slippage. Good data means participants buy that currency immediately. Volatility spikes - prices move fast, spreads widen, and liquidity drops. High volatility increases the risk of unexpected order execution.
Concept 04 — The economic calendar
A free tool listing every upcoming data release - time, currency, and importance level. Key sources:
forexfactory.com - industry standard, color-coded by impact
investing.com - detailed filters by country
MT5 platform - built-in calendar under the Calendar tab
Tip: US unemployment data (NFP) is always released on the first Friday of the month.
Concept 05 — Reading the calendar: key columns
Every economic calendar shows the same core data fields:
Impact / Priority - RED = high, YELLOW = medium, GRAY = low. Focus on RED events.
Forecast - what analysts expect. The market prices in this number before the release.
Actual - the number published. This is what moves the market.
Previous - last period's figure. Useful to spot trends month-on-month or quarter-on-quarter.
Reviewed - sometimes prior data is revised, which can also trigger price moves.
Concept 06 — How to trade the news: NFP example
US Non-Farm Payrolls (NFP) is the most watched release. Published on the first Friday of each month, it measures jobs created in the US.
Example (historical data): Previous: -133K | Forecast: +65K | Actual: +178K
The actual result (+178K) beat the forecast (+65K) - strongly positive for USD. Result: USD strengthened and EURUSD dropped sharply at 15:30.
Rule: if Actual is greater than Forecast for a country - buy that country's currency.
Watch the 1-minute chart around release time to see the price reaction.
Concept 07 — 7 things to remember
Markets change - what mattered 20 years ago may matter less today
Reactions can surprise: too strong, too weak, or delayed - markets are people
Focus on RED high-impact events and read about them before they happen
US employment data and central bank rate decisions are always the most important
News is unpredictable - something unexpected can always move the market
US hours are most active, then Europe, then Asia
Commodity-linked currencies such as CAD and AUD react to commodity price news too
Concept 08 — Quick-start checklist
Before each trading session:
Check the economic calendar for high-impact RED events today
Note the time and currency of each release
Look at Forecast vs Previous to understand market expectations
Avoid opening new trades 5-10 minutes before a major release
After release: compare Actual vs Forecast to understand direction
Use support.weltrade.com for platform help and trading resources
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