An economic calendar is a tool used by investors to monitor market-moving events. These events can be anything from monetary policy decisions to economic indicators. These events are announced in reports and have a high probability of impacting financial markets. Therefore, investors use an economic calendar to stay abreast of these events and make smart trading decisions. To learn more about how economic calendars work, read on. Here are some common examples:
Economic calendars are available on most financial and economic websites. Each calendar is customized according to the user’s needs, and each calendar includes macroeconomic events. Common economic events on the calendar include central bank interest rate decisions, trade balance data, inflation figures, and employment reports. Most calendars also offer a macro-release filter, allowing you to select events based on their priority, country, or region, and even the currency they will affect.
One of the most common uses for an economic calendar is for pre-data trading. By trading before a certain data release, you’re taking advantage of volatility that occurs after the data has been released. For example, if EUR/USD goes below 1.1200, you can put a buy-stop at 1.1230 and a sell-stop at 1.1180. Remember to always protect your pending orders with a stop-loss, because when the data is released, they’ll trigger an order that causes a loss.
Another popular use of an economic calendar is to keep track of key economic indicators. These data will affect markets worldwide. Some economic indicators are released every quarter. For instance, the gross domestic product in the United States is released quarterly. This data will give you a general idea of the strength of the economy in the recent past. The same goes for inflation and other key economic indicators. The data is available at the same time for over thirty-four countries worldwide.
Some of the data released on the economic calendar are related to inflation. These statistics are used by central banks to determine how much interest rates will increase or decrease. If inflation is high, the central bank will increase interest rates, which will stimulate the economy. The data will also indicate the strength of a country’s economy. If these numbers are high, the central bank will raise interest rates, thereby stimulating economic growth. The opposite will also occur when inflation is low.
Another important factor for traders is the economic calendar. Many traders use the economic calendar as a tool for fundamental analysis. This method requires checking macroeconomic data, such as GDP, employment, consumption, and inflation. This tool is always open on their computers and helps them avoid a nasty surprise. If a major event comes out that affects the economy, the market will likely react by either rising or falling dramatically. As a result, a good economic calendar will help you make informed decisions.