The economic calendar: how to read it and prepare your week

The economic calendar is the simplest and most useful tool in fundamental analysis. It lists, hour by hour, every data release, central bank decision and major speech. Even if you only trade technicals, you need to check it: it's what stops you from opening a position thirty seconds before NFP.

Anatomy of a line

The most important column doesn't exist: it's the gap between actual and consensus. Many calendars colour the actual figure green or red depending on whether it's better or worse than expected for the currency. It's handy, but keep a critical eye: for an unemployment rate, a lower number is good news.

Also look at the revised previous. When last month's figure is corrected, the calendar usually flags it with a small mark or a second value. A big revision can completely change the reading of a number that looked in line.

Setting up your calendar properly

1. Time zone: pick yours. Being off by one hour is enough to land you in the middle of a release. Daylight saving time doesn't change on the same date in the US and Europe: double-check the displayed time during those weeks.
2. Currencies: keep only those in the pairs you trade. If you trade EUR/USD and gold, USD and EUR are enough.
3. Impact: start by showing high impact only. Add medium impact once you're comfortable.
4. Period: display the whole week, not just today.

The events that really matter

Not all high-impact events are equal. A handful dominate the market almost every time: rate decisions and press conferences from the major central banks, NFP, inflation data (US CPI, eurozone HICP, UK CPI), PMIs and the ISM, retail sales and GDP. Speeches by central bank chairs can also trigger big moves, with no set end time.

Also watch for clustered releases. At certain times, several figures come out together for the same currency: in the US, for example, retail sales and producer prices sometimes drop in the same minute. The market then weighs them up, and a good number can be wiped out by a bad one. Always note everything released in the same slot.

Finally, don't forget both currencies in your pair. If you trade GBP/USD, a UK release in the morning and a US release in the afternoon can pull price in two directions on the same day. Your plan has to cover both sides.

Prepare your week in ten minutes

Build a Sunday-evening or Monday-morning routine. It takes ten minutes and saves you from most nasty surprises.

1. Open the calendar filtered on your currencies and high impact for the whole week.
2. Write the three to five major events into your plan, with the day and time in your time zone.
3. For each one, write down the consensus and what would count as a real surprise.
4. Decide your rule in advance: close, reduce, or hold with a suitable stop.
5. Spot public holidays: thinner markets, early closes, sometimes wider spreads.
6. On the day itself, check again: events can be added or moved.

The five-minute rule

In the minutes before a high-impact release, liquidity providers pull some of their quotes. The spread widens, sometimes a lot, and price action gets erratic. Opening a position right before the announcement is like flipping a coin while paying more to play.

And if you already have a position open? Ask yourself two questions. Can I accept a fill beyond my stop because of slippage? Does my trade rest on an idea this release could invalidate? If the answer to either is no, reduce or close beforehand.

The Analyse-Trading calendar

The Analyse-Trading economic calendar gathers live releases from the major economies, with their importance level and filters by country and impact. Keep it open during your prep routine and always check the displayed time against your own time zone.