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Forex Trading Indicator - Better than expected Economic Calendar Events

by QuantShare, 1548 days ago
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For each Forex currency pair, you can use the Currency Pairs Calendar Data trading item to download historical calendar events in a custom intraday database. This database will contain calendar events for several currency pairs as well as the actual, the forecast and the previous value for each event.

This indicator requires this data in order to calculate the percentage of better than expected events for a given country (for each trading day (bar period)). That is, the number of events where the actual value is higher than the expected value divided by the total number of economic events during the bar period.

The Forex trading indicator name is "PerBetterExpectedEvents".
For example on April 2, 2010, there were five economic events related to the United States.

Average Hourly Earnings (Month over Month): The actual value is -0.1 and the forecast value is 0.2.
Nonfarm Payrolls: The actual value is 230 and the forecast value is 187.
Average Hourly Earnings (Year over Year): The actual value is 1.8. There is no forecast value.
Unemployment Rate: In line with expectations (9.7).
Average weekly Hours: The actual value is 34. There is no forecast value.

Among these five economic releases, the only one that has a higher than expected value is the "Nonfarm Payrolls". The "Average weekly Hours" and "Average Hourly Earnings (YoY)" have no forecast values.
Therefore, the value that is returned by the PerBetterExpectedEvents("United States") Forex indicator is equal to 20%.

Here is how to calculate the moving average of this better than expected economic releases indicator:
moving_average = SMA(PerBetterExpectedEvents("United States"), 10);

And here is how to create a trading rule that compares the economic releases of a Forex pair:
For the GBPUSD currency pair (U.S. Dollar / British Pound)
forex_diff = PerBetterExpectedEvents("United Kingdom") > PerBetterExpectedEvents("United States");

The variable "forex_diff" of this trading rule returns one when the percentage of better than expected economic releases in United Kingdom is higher than the one of the United States.




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Type: Trading Indicator

Object ID: 554


Country:
All

Market: Forex Market

Style:
Fundamental Analysis

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Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.