What is the Economic Calendar?
The economic calendar refers to the schedules dates of significant releases or events that may affect movement of individual security prices or markets as a whole. Investors and traders use the economic calendar to plan trades and portfolio reallocations, as well as to be alert to chart patterns and indicators that may be caused or affected by these events. The economic calendar for various countries is available for free on multiple financial and market websites.
Understanding Economic Calendars
Economic calendars usually focus on the scheduled releases of economic reports for a given country. Examples of events that are listed on an economic calendar include weekly jobless claims, reports of new home starts, scheduled changes in the interest rate or interest rate signaling, regular reports from the Federal Reserve or other central banks, economic sentiment surveys from specific markets and hundreds of other types of events. The majority of the events listed fall into one of two categories: projections of future financial or economic events, or reports on recent financial or economic events.
Traders and investors rely on the economic calendar to give them information and to provide trading opportunities. Traders often time movement into or out of positions to correspond either with an announcement of some event or with the heavy trading volume that often precedes a scheduled announcement. Following the economic calendar can be especially beneficial for a trader who wants to take a short position. If the trader guesses correctly about the nature of the announcement, she can open the position immediately before the scheduled announcement and then close it within hours of the announcement.
- Low Volatility Expected
- Moderate Volatility Expected
- High Volatility Expected