WHAT IS Economic Calendar
The economic calendar is a calendar of dates of significant pre-scheduled events that may affect movement of individual security prices or markets in part or 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 instigated by these events. The economic calendar is available for free on multiple financial and market websites.
BREAKING DOWN Economic Calendar
The economic calendar is a calendar of scheduled events that occur during the year that may affect the market or prices of individual financial instruments. Examples of events that are listed on the economic calendar include weekly jobless claims, reports of new home starts, scheduled changes in the interest rate, regular reports from the Federal Reserve, predictions from specific markets and hundreds of other types of events. The majority of the events listed fall into one of two categories: predictions 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 to make better predictions of movement and plan trades for higher profits. Traders often time movement into or out of positions to correspond either with an announcement of some event or trend affecting the industry of the specific security, 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, because if they guess correctly about the nature of the announcement, they can open the position immediately before the scheduled announcement and then close it within hours of the announcement, instead of having to wait longer to close the position of the trend is stagnant or volume is low.
Navigating Economic Calendars
Economic calendars are available for free public access on multiple financial and economic websites. These calendars vary from site to site, however, and although it is referred to as "the economic calendar," the actual calendar listings depend on the focus of the website and the events the users of the website are likely to be interested in. For example, the economic calendar on some websites lists only events in the U.S., while others list events in other countries with a set of qualifications decided by the site owner, including market cap or geographic location. There are other sites that allow the user to build their own economic calendar by using filters to display or hide events by different sets of qualifications.