ECONOMIC CALENDAR: How Pro Trader Use In Stock Market

USE OF ECONOMIC CALENDAR:

Economic Calendar (Economic Indicator) is the advance leading indicator for stock market trading that measures the economic health of a country .economic indicator gives the advance signal or fundamental analysis in forex trading, commodity trading and stock market trading.
Every country announces its economic growth data on a weekly and monthly basis there is some most important indicator that professional trader use in their trading strategy:

1   Purchasing Manager Index (PMI)

2  GDP (GROSS DOMESTIC PRODUCT)

3  Consumer Price Index

4   income statement

5   Unemployment Rate

6   Interest Rate Decision

7  Producer Price Index

8  Consumer Confidence Index (CCI)

9  Supply Management Institute (ISM)

10   Gross National Product (GNP)

11  Nonfarm Payrolls 

12  Retail Sales Data

13  Current Trade Balance

14   Housing  Start Data or Building Construction

15   Crude Oil Inventory

16   Industrial Production Index

17   ISM Manufacturing Report

18   Initial Jobless Claim

The FAQ on Economic Calendar(Most Important)

Purchasing Manager Index (PMI):


The Purchasing Manager Index measures the economic health of the manufacturing sector. The data is collected through a survey of 400 purchasing managers in the manufacturing sector and is based on five different sectors: production, new orders, inventions, supplier delivery, and employment levels. PMI can provide information about the occupational status.

 PMI provides current economic activity to analysts, purchasing managers, and company managers.

GDP (GROSS DOMESTIC PRODUCT):

GDP or GDP is the total value of goods and services produced by an economy. To calculate GDP, you add government spending to total consumption, plus investment and the difference between exports and imports.

 GDP is a backward-looking measure of economic growth because it is usually released 4 weeks after the end of a quarter.

Consumer Price Index (CPI):

The Consumer Price Index is an inflation index that reflects changes in prices that directly affect the consumer. The index is calculated by comparing the change in weighted basket prices of goods and services and that change for a prior period. Items that are focused on include house prices, rent, energy, and food.

The CPI is the most widely used measure to replace inflation.

What is the income statement used for?

The new Residential Construction Report is popularly known as Housing Containing Statistics of Housing Construction Activities. This is a monthly report on housing, construction begins with the laying of the foundation, a grant of building permits that indicates how many new homes are planned to be built in the near future.

 The income statement shows the firm's revenues and expenses for a specific financial period. This revenue item, expense items and the difference between them give the firm's net income for an accounting period.

Unemployment Rate:

The unemployment rate is a ratio that is calculated by dividing the number of unemployed people by the total number of people in the labor force. This number is calculated slightly differently depending on the country you are evaluating.

 In the United States, this number is referred to as U3 and is narrowly defined, but there are broader measures including U6, which measures part-time workers as well as those unemployed. A more accurate reflection of the situation is considered.

Interest Rate Decision:

The interest rate decision generally refers to changes in sovereign interest rates that occur at regularly scheduled monetary policy meetings held by a central bank. Each central bank sets an interest rate policy by establishing a deposit rate or lending rate for commercial banks in that country.

 This is the most widely observed phenomenon and a surprise can generate significant instability.

Producer Price Index (PPI):

The Producer Price Index (PPI) is a measure of inflation at the wholesale level. The PPI is calculated by evaluating about 10K prices that come to the Bureau of Labor Statistics every month. The index outstrips almost all industrial goods and service in the United States, including mining.

 PPI also focuses on commodity-based prices, such as crude oil as well as a commodity-based final demand.

Consumer Confidence Index (CCI):

The American Consumer Confidence Index (CCI) is an indicator that determines whether consumers are experiencing positive or negative sentiment levels. The index is defined as the degree of optimism, or pessimism, on the state of the economy, calculated by evaluating the level of spending or savings.

 Self-confidence in the US helps gauge spending which makes up about 65% of GDP

Supply Management Institute (ISM):

The Institute for Supply Management (ISM), a premier supply management institution of the American ISM, publishes monthly ISM reports on the business. This publication brings forth both surveys: manufacturing and non-manufacturing. The ISM index report is produced to reflect employment, business activity, production inventories, new orders, and supplier delivery status.

 In its monthly release, the data is used as a popular economic indicator and forecaster.

Gross National Product (GNP):

Gross National Product (GNP) is a measure of growth that focuses on forecasting the value of all final products and services produced by the economy during a specific period of time that domestics are produced domestically by the country's residents. The index is usually compared to GDP.
GNP is calculated by the sum of personal consumption expenditure, private domestic investment, government expenditure, net exports, and any income, minus income earned by the foreign residents within the domestic economy.

Nonfarm Payrolls :

The Non-Farm Payroll Report is a US employment release, measuring the net profit of employees measured during a corporate survey. The report does not include farm laborers, private domestic workers or non-profit organization employees. The report has been released by the Department of Labor and differs from the household survey report.
The report is released on the first Friday of every month and is considered the most important economic data release.

Retail Sales Report:

The Retail Sales Report in the United States is a comprehensive retail demand report issued by the Department of Commerce. Retail sales are a combined measure of retail sales and calculated by data sampling across countries. The report measures consumer demand and helps reduce overall consumer spending.
Consumer spending makes up about 65% of GDP in the United States, making retail sales a significant economic release.

Current trade balance:

The current trade balance describes the balance of a nation, describing the investment and savings produced by a country. Current trade balance is defined by the sum of net income as well as export minus imports of goods and services.
The current trade balance deficit or surplus helps to describe the value of exports relative to imports.

 Housing  Start Data or Building Construction:

The new Residential Construction Report is popularly known as Housing Containing Statistics of Housing Construction Activities. This is a monthly report on housing, construction begins with the laying of the foundation, a grant of building permits that indicates how many new homes are planned to be built in the near future.
According to the February 2014 New Residential Construction Report, construction of new American homes has come down. But the number of applications for new building permits has increased significantly. This signal will pick up housing construction works in the near future.

Crude Oil Inventories:

Crude oil inventions are reported on a weekly basis by the US Department of Energy, with the crude oil market typically experiencing volatility shortly after the EIA report was released.

Industrial Production Index:

The Industrial Production Index released by the Fed is used as a monthly report on production data. Industrial production refers to the raw quantities of goods produced by industrial firms such as factories, mines, and electric utilities in the United States. It indicates overall economic activity and GDP.
The monthly release summarizes the data with percentage changes at the month-to-month and year-to-year levels.

ISM Manufacturing Report:

The ISM manufacturing report is based on a survey of purchasing and supply officers. Survey responses reflect changes in the current month, if any, compared to the previous month. A non-manufacturing index shows employment, business activity, new orders, and supplier delivery status.
The Manufacturing ISM Report on Business provides valuable data used in economic analysis and forecasting.

Initial Jobless claim



Importance of Economic Calendar For Day Trading:
The economic calendar is the most important factor of commodity and currency market, it measure the health of the economy of a country and also known as leading indicators for the stock market. some important event like unemployment claim, nonfarm payroll, GDP, etc are the event that gives advance signal for gold and currency trading, during these event market is more volatile than normal trading hours so during this period be very couscous for uncertainty and trade with level.

Economic Calendar for Forex Trading:
economic calendar play a vital role in forex trading, because of its most advance leading signal that give the advace signal for forex trading and many currebcy pair are traded .

How to understand an Economic Calendar:
it is very important to understand the economic calendar for trading , evry data has some significant effect on particular  countary event as





















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