The economic calendar is a calendar of scheduled events that occur during the year that may affect the market or prices of individual financial instruments. Examples of events that are listed on the economic calendar include weekly jobless claims, reports of new home starts, scheduled changes in the interest rate, regular reports from the Federal Reserve, predictions from specific markets and hundreds of other types of events. The majority of the events listed fall into one of two categories: predictions of future financial or economic events, or reports on recent financial or economic events.
Traders and investors rely on the economic calendar to give them information to make better predictions of movement and plan trades for higher profits. Traders often time movement into or out of positions to correspond either with an announcement of some event or trend affecting the industry of the specific security or with the heavy trading volume that often precedes a scheduled announcement. Following the economic calendar can be especially beneficial for a trader who wants to take a short position, because if they guess correctly about the nature of the announcement, they can open the position immediately before the scheduled announcement and then close it within hours of the announcement, instead of having to wait longer to close the position of the trend is stagnant or volume is low.