What Is The Economic Calendar?

The economic calendar represents all important planned events or significant releases that may influence the movement of individual security prices or the whole market. Traders and investors follow the economic calendar because it helps them to plan their trades and portfolio movements. It also enables them to be alert to chart patterns and indicators that may be a result or affected by the events included in the economic calendar.

Why is an economic calendar important?

Economic calendars vary from country to country. Generally, each calendar focus on the scheduled releases of the local financial reports. For example, these could be events like changes in the interest rate or interest rate signalling, the regular reports of the National Bank, the weekly jobless claim and many more economical events. Most of them fall into two main categories according to the time they are happening:

– projections of forthcoming financial and economic events

– reports from recent financial and economic events

As we mentioned, traders and investors rely on economic calendars to support their decision-making process. They are particularly useful to traders who prefer to takes short positions. Suppose traders guess correctly about the type of information of the given future event, for example, a higher or lower interest rate. In that case, they can open a position just before the scheduled announcement and then close it a few hours after it.

Economic calendars vary from country to country but also traders create their own calendars based on the information they need to make their trading decisions. That usually depends on the asset classes they have included in their portfolios and the markets they are trading at. For example, a trader has crude oil contained in their portfolio. In that case, they will customise their economic calendar to incorporate information about the major releases from oil-producing regions, the US Energy Information Administration weekly petroleum status report and the quarterly filing dates of the oil sector companies he follows.