Ceri Austin 
Economic calendars can help traders stay on top of news events that may affect market volatility. The news events are typically graded and can range from minor (which don’t carry any special markings) to “high.”
As the largest economy, the US’s economic data tends to have a large impact on global financial markets. However, data from other economies can also influence currency prices.
What is an Economic Calendar?
An economic calendar is a tool used by traders to track important financial events and news. It displays all scheduled data releases, such as employment reports, central bank announcements, inflation figures and GDP data, in one convenient location.
In addition to these major news events, an economic calendar may also include any other news items that have the potential to affect markets (for example, a US president stepping up to the microphone at a campaign rally and making off-the-cuff remarks could send the USD soaring as investors react to political risk).
The most accurate economic calendars will display all of the key information for each event, such as the date and time of the release, its significance, the previous value and the forecasted impact (positive or negative). You can find free economic calendars on most Forex websites, though many traders prefer to customize their own using data from various sources. You want a clean and easy-to-use interface with fast loading times. You wish to be able to filter events simultaneously with keywords and custom dates.
How Does an Economic Calendar Work?
An economic calendar delivers traders with timely information about when specific market-moving data is set to be published. This enables them to anticipate how the market will react to these events and to plan their trading strategy accordingly.
Indicator releases are often accompanied by market expectations, or consensus forecasts, which give traders a sense of what to expect from the data that will be released. This is especially useful for traders who wish to capitalize on market moves that can follow the release of positive or negative news.
The most common indicator news to watch for is non-farm payrolls, central bank interest rate decisions and inflation data. An economic calendar will show traders all of these important news events in one place and allows them to filter by relevance and impact. The most significant market moves often follow a surprise in the actual data, when it contrasts with what had been expected by the market.
What are the Most Important Economic Calendar Events?
The most important economic events for traders include inflation data, employment reports and central bank policy statements. These events can affect security prices and market sentiment. They can also impact specific currencies. For example, the US Non-farm payroll (NFP) report and the Fed decision have a large impact on the USD.
The NFP report is especially significant because it gives insight into the health of the economy. However, there are many other events that may affect the markets. Traders should always keep an eye on the economic calendar and be prepared to act when market-moving news hits the wires.
Economic calendars are usually displayed as a chart and list several market-moving events each day in chronological order. Each event is typically categorized with its importance, previous value and forecasted value. Equiti’s economic calendar also includes the volatility level, which shows how much the event is expected to impact the markets given certain circumstances. This is helpful because it allows you to focus on the events that will have a larger impact on your trading strategy.
How Can I Use an Economic Calendar to Trade Forex?
The economic calendar is a crucial tool for traders of all styles and experience levels. Beginners can use it to understand the nuances of trading, and more experienced traders can take advantage of potential volatility bumps before and after news events.
Most economic calendars list upcoming global data events by default, and they can be customised to display the timeframe that matters most to you. These events are typically categorised into high, medium and low impact according to their likely market reaction.
The ‘high’ category can include interest rate decisions by central banks, non-farm payroll reports and other widely cited data points. The’medium’ category can also include a range of other data, such as consumer sentiment surveys and unemployment statistics. Each event usually comes with a forecast and previous values that can help you gauge how the data might move the markets. Traders can use this information to plan their trades and identify key support and resistance levels.
