Difference between Application Events and Component Events in Lightning #SalesforceAugust 3, 2018
A component event is fired from an instance of a component. A component event can be handled by the component that fired the event or by a component in the containment hierarchy that receives the event. The component that fires an event is known as the source component.
The component that fires an event can set the event’s data. To set the attribute values, call event.setParam() or event.setParams().
Fire a component Event
In terms of firing an event you need to register that component event in your component and then you can fire the same. it looks something like below
A component can handle its own event by using the <aura:handler> tag in its markup. The name attributes in <aura:registerEvent> and <aura:handler> must match, since each event is defined by its name.
Application event in simple words can be used in multiple components and component that has the handler for the event will be notified.
To create a custom application event, you need to use the <aura:event> tag in the event resource. You need to define type=”Application” tag. To use you need to register application event same way as component event
To fire the application event you need to use event.setParam();
Events are of the most widely used in lightning component. So when you should use which one is also important.