What Is Economic Calendar?
An Economic Calendar is a web tool listing all economic events, forecasts, and actual data and rating them based on their power in the market.
An Economic Calendar lists all events from various countries that announce activities and reports that impact financial markets. It ranks the events according to their powers, commonly high, medium, and low. Some economic indicators give one star, a two-star, and a three-stars, to show the strength of an event.
Economists and financial institutions forecast the results of economic surveys and numbers ahead of their release. Investors and traders compare the forecasted data with actual data to predict future movements. Generally, investors consider the forecasted data in their analysis ahead of release. If the forecasted number is the same as the actual data, market movement is not expected.
An Economic Calendar also shows the previous data to help analysts. It is helpful to know the past, present, and expected (forecasts) data.
Every economic calendar provides the historical data of the events. Investors look at the historical data to read the trends and forecasts.
An economic indicator is customizable in terms of date, country, strength, etc. This feature helps make the calendar cleaner and easy to understand.
How to Read Economic Calendar Events
As mentioned earlier, there are one-star to three-star events. However, all one-star events or all three-star do not equal.
I continue talking about three-star events, as they are the most influential.
All three-star events are powerful, and like technical indicators, they are divided into the leading, lagging, and confirming indicators. A leading indicator helps you predict the future, a lagging expresses what happened in the past, and a confirming verifies the current market trend.
An analyst should sort out these events according to their types and influence.
A three-star event does not necessarily mean that a change in the market is coming. It is just a possibility.
Expected vs Unexpected
Before the release of data, organizations predict the result of the event, which is what investors expect. Expectations play a crucial role in the financial market because investors count on them.
Normally investors do not react swiftly if the released data is the same as expected. On the other hand, investors respond quickly if the difference is massive between the expected and the released data.
An investor needs to check out what organizations and investors expect because they discount expectations ahead of the release.
What Organizations Release These Data?
A website such as srading.com does not produce data available in the Economic Calendar. Instead, over 100 organizations are the original publishers. For example, the Fed announces the interest rate in the USA.
An Economic Calendar lists reports and speeches as well. To analyze them, you need to read or watch them.
Are Economic Calendar Data Reliable?
The events published in the economic calendar are produced by independent and governmental organizations. Most of the time they are reliable but not always.
Governments may manipulate the data during a crisis to calm down unrest for other political purposes. Generally, the government manipulates the survey by a selective selection of responders in surveys or by manipulating the ingredients of the survey to show better the economic and political situation. As an investor during the chaos, you need to consider possible manipulations