An economic calendar is often used by investors to track market-moving news, including policy decisions and economic indicators. Market-moving news, which are usually released or reported in a financial report, have an extremely high likelihood of affecting the broader financial markets the next day. Because the timing of news releases and reports can be volatile, investors need to stay on top of all market-mechanical activity in order to gain the most from their investments. Investors must stay abreast of both general economic news and specific market-specific news and information. This can take many forms, from stock quotes to market commentary.
An effective way to use economic calendars is to compile a “snapshot” of the overall economic performance for the past year or more. Then, gauge how each indicator is performing against its peers using the same indicators. By aggregating the results from several economic calendars, investors can get a better sense of how the indicators are performing compared to each other and how they compare with past performance. This gives investors a clearer idea of what to expect for the coming year and helps them develop better investment strategies.
The overall performance of the global economy is always a matter of major interest to traders and investors. Two key pieces of information that can help a trader evaluate the state of the economy include what it is doing on a national level and what it’s doing internationally. A comprehensive analysis of the worldwide picture can help a trader makes his or her buy and sell decisions with more confidence. The overall strength and weakness of the U.S. dollar are a clear illustration of how the state of the global economy affects trading. However, an accurate analysis of national economic data alone can’t provide a complete picture of the state of the economy, particularly since different countries’ economies react to changes in the international market in different ways.
As part of his or her economic calendar analysis, a trader or investor should also look at the volatility levels of the individual markets. Volatility is the ability of a security or market to increase in price while costing less to buy or sell. Because prices in the markets react so quickly to tiny changes in the supply and demand of particular securities, they act as a barometer for underlying risks. In order to successfully determine how the markets are trading, a trader should incorporate the use of various types of price patterns such as the Stochastic, CCI, RSI, CCAP, and other indicators to determine the levels of volatility in the markets.
One of the most important factors to consider in the development of economic calendars is to identify the proper stop-loss levels. Stop-loss orders are designed to limit losses that occur as a result of extreme market conditions. Stop-loss orders can be set at specific levels depending on various indicators. Some traders prefer to allow their stop-loss orders to be set at their initial price targets; however, more aggressive buy-and-hold strategies may require these levels to be lowered in certain circumstances. Traders who use stop-loss orders must evaluate and optimize their strategies to accommodate the changing landscape of the markets.
Another factor that can affect the development of the economic calendar is the time left on the clock. The length of time left on the clock affects the range of possible outcomes. It is a simple concept of cause and effect. A trader who wants to get in right away and take advantage of an indicator may do so at the expense of waiting a long time. On the flip side, a person who holds out may not have the financial resources to wait out the effect of extreme volatility and bearish indicators.
To further evaluate the strength and viability of an economic calendar, traders should look for indicators that support the desired direction of the markets. If a trader is confident that a trade will close soon, he or she should avoid short positions, as short positions introduce higher risks. However, traders should still take advantage of any volatility in the markets, but they should do so at the expense of a larger trading volume, which increases liquidity.
Most traders focus on economic calendar interpretation to understand price movements in the markets better. However, news-driven decisions are not affected by the economic calendar, unlike news-driven activities such as pollution release and earnings reports. News-driven trades are made based on local events and expectations. They are not affected by economic calendar.