Professional traders check the economic calendar once in a while to see the upcoming events on the financial market. Successful traders even sign up for notifications for the events they don’t want to miss. The calendar helps investors to create an analysis of the market based on the news from the economic field. If you want to become a better trader, you have to know the upcoming macroeconomic events that usually move the market.
Events That Affect Trading:
There are a wide range of numerous events that have an impact on the stock market. Prices go up and down based on global economy changes or inner situations like presidential elections. It is almost impossible to track all of them. This is why there are numerous economic calendars available online for free. They help to keep up with the global community and underline the key occasions you can’t miss.
Political situation:
Any presidential election or revolution can turn the market inside down. If an unexpected event happens in countries like the US or China, it affects markets around the world. The first thing that an election affects, no matter the outcome, is the currency. Conservative parties are usually more fiscally connected, while democratic parties spend more money on foreign affairs. You can check the program of each party to understand the consequences of elections. Read the polls to be aware of major opinions. If the outcome is unexpected, the market can face big changes. Usually, elections come hand in hand with the increased volatility.
Macroeconomic:
The macroeconomy is the part of economics that studies the entire specter of events, performances, behavior, and structure of the economy in general. This data is usually crucial for every trader. It is the most relevant factor to consider before you start investing. You will see it in every economic calendar. Pay attention to the next factors:
• Sentiment surveys that represent the expectations of the market. Many countries have Purchasing Managers Indices on a terminal basis. They are watched to define the spending intentions of business in general;
• Interest rates are incredibly helpful for traders. To be able to gain profit, you have to compare one country’s interest rate with another. A higher rate means appreciating foreign currency;
• Employment rates must concern you if you want to start a long game with the stocks you have. The rate of unemployed people may decrease or increase the value of stocks. A higher employment rate equals strong currency. Mark the date of Non-Farm Payrolls report release in your calendar. Usually, it is released every month, on the first Friday;
• Rates of inflation can be tracked by two indicators. Watch for the Consumer Price Index or CPI and Producer Price Index or PPI. CPI reveals the prices for the standard consumer basket. PPI shows the changes in the prices from national developers. During the low rate of inflation, banks can cut the interest rates, making the currency weaker;
• GDP includes information about the national economy’s growth in general. Traders prefer to check it out before deciding how to act on the market. GDP analysts gather employment rates and housing reports before calculating GDP.
Why Do Events Matter?
If you want to gain money from trading, you need to keep up with economic events. It is a perfect tool for any trader. You have to be armed with basic instruments to become successful. Consider events as a:
• Source of the volatility. Not only presidential elections but numerous planned events can become a great source of the volatility you expected. If you know how to use the volatile market to your advantage, you can gain profit. A stable market may be great for beginners, but it is too hard to earn a fortune there;
• Pre-scheduled benefit. You can predict major events on the market. Economic calendars contain the most important of them, and all you need to do is to think through your actions after they happen. At the same time, an unexpected tweet from the head of the country can turn the market upside down;
• Source of gain you can control. Almost all events that happen on the market are repetitive. Although they have other names and slightly differ in numbers, they are not new, and you or your parents may have already seen them. After you analyze multiple events, you will be able to control even the most unpredictable occasions.
Using Calendar for Profit:
Once you learn how to use the economic calendar, you will become a step closer to understanding the market. No matter how trustable your company is, you still have to understand the basics of macroeconomics and inner processes. After some time you will easily predict the behavior of the key players on the market.