How to Read an Economic Calendar: Importance, Time, Previous and Forecast
Do you open an economic calendar and not know where to look?
In short, check the release times of high-importance indicators first, and avoid trading around them or reduce your lot size.
This article covers how to read the calendar, time zone conversion, key indicators, and what to do before and after releases.
In short: check importance and release time first, and don't force trades around them
- Before trading, check the release time of high-importance indicators (three stars or red)
- An easy order to read in is release time, importance, then previous and forecast
- Japan time shifts between summer and winter time, so check the conversion each time
- Prepare for wider spreads and slippage around releases, and reduce your lot size
The basics of reading an economic calendar
An economic calendar is a table listing the release schedule of economic indicators from each country. It shows the release time, country, indicator name, importance, and previous, forecast and actual values.
| Item | Meaning | What to look at |
|---|---|---|
| Release time | The time the indicator is published | Always check whether the time is shown in Japan time |
| Country / currency | The issuing country and the currency affected | Narrow down to the countries of the pairs you trade |
| Indicator name | Names such as the jobs report or CPI | Many are abbreviated, so learn the main ones |
| Importance | How much the market is expected to react, shown by stars or colors | Standards differ by site, so check the legend |
| Previous / forecast / actual | The prior value, the market forecast and the actual result | The next section explains how to read them |
Importance is often shown with one to three stars, or with yellow, orange and red. However, standards differ by site, and there is no unified official rule.
At first, it is easier to show only the highest importance level. Once you are used to it, add medium-importance indicators.
How to read previous, forecast and actual values
Previous is the value for the prior period, forecast is what market participants expect, and actual is the number actually released. Markets are said to react more to the gap from the forecast than to the result itself.
- 1
Check the release time
Note the release time in Japan time, and confirm whether you can watch the screen at that time.
- 2
Compare the forecast with the previous value
See whether the forecast is stronger or weaker than the previous value, and get a sense of what result the market has priced in.
- 3
Look at the gap between actual and forecast
If the actual is stronger than the forecast, that country's currency tends to be bought. If it is weaker, it tends to be sold.
- 4
Watch the price action
Moves right after the release are rough, and they sometimes reverse afterward. Waiting until things settle is important.
The previous value may also be revised later. In that case, the revised value is used for comparison.
Time differences and daylight saving conversion
Overseas indicators are set in local time, so in Japan time they shift by one hour between summer and winter time. US daylight saving time runs from the second Sunday in March to the first Sunday in November.
| Example indicator | US Eastern time | Japan time (summer time) | Japan time (winter time) |
|---|---|---|---|
| US jobs report / US CPI | 8:30 | 21:30 | 22:30 |
| FOMC rate decision | 14:00 | 3:00 next day | 4:00 next day |
Europe switches daylight saving time on different dates from the US. As a result, there are a few weeks when the time difference shifts.
- The jobs report is often in the month's first Friday, but there are exceptions and the date changes each month
- Release dates can move because of holidays or government circumstances
- Setting the calendar's time zone to Japan time makes mistakes less likely
- Server time on platforms such as MT5 differs from Japan time, so see the related column
Main indicators to watch
| Indicator | What it covers | Currencies most affected | Notes |
|---|---|---|---|
| US jobs report | Change in US employment and the unemployment rate | USD | Prices tend to move sharply right after release |
| US CPI | Change in US consumer prices | USD | Affects views on rate hikes and cuts |
| FOMC | The meeting that sets US policy rates | USD | Prices also move on the statement and press conference |
| Policy rates of each country | Interest rates set by central banks | Each country's currency | Remarks on future policy get more attention than the result |
| GDP | The economic growth rate of the whole country | Each country's currency | There are preliminary and revised figures |
How much attention an indicator gets changes with the market's interest at the time. For example, when the rate outlook is the focus, price and jobs indicators are watched especially closely.
If you trade pairs that include the yen, also check Japanese indicators. The Bank of Japan's monetary policy meetings and Japan's CPI are typical examples.
How the gap between actual and forecast moves prices
The market has already priced in the forecast to some extent before the release. So if the result matches the forecast, prices may not move much.
- Actual stronger than forecast: that country's currency tends to be bought
- Actual weaker than forecast: that country's currency tends to be sold
- In line with forecast: the news may be fully priced in and nothing moves, or prices may even move the other way
- For indicators tied to interest rates, the direction of a currency is sometimes not straightforward
Even with the same result, the reaction changes with what the market cares about at the time. A currency being sold on a strong number is not unusual.
Look at the gap from the forecast, not whether the result is good or bad
If you assume "a strong number means buy," you can get caught in a reversal. Start by watching the price action and practicing on a demo account.
Practical steps around releases: positions, spreads and slippage
- 1
Review your positions before the release
About 30 minutes before the indicator, check the positions you hold. If an unrealized loss is large, consider reducing or closing the position.
- 2
Reduce your lot size or sit out
If you must hold, use a smaller lot than usual. Sitting out is also a perfectly good decision.
- 3
Set a stop-loss order
Avoid going into a release without a stop order. Note, however, that the execution price can still slip.
- 4
Wait until things settle
Right after the release, prices swing wildly. Resume trading once spreads return to normal.
Spreads tend to widen temporarily around releases. It is also a time when slippage, where an order is filled at a worse price than specified, is more likely.
With a large lot, a sudden move can drop your margin level sharply. Stop-out levels differ by broker, so check them beforehand.
Economic releases and cashback
Many cashback systems calculate returns from your trading volume. However, wider spreads around releases push up your trading costs.
Return amounts are not yet confirmed, and we will post them on each broker's page at launch. Avoid forcing yourself into volatile periods just for returns.
- Check spreads around releases on each broker's official page
- Before looking at returns, compare the total cost including the spread
- Do not raise your lot size too much to chase returns
- The eligibility conditions for returns differ by broker
Enter a currency pair and lot size to check the profit or loss per pip. Work out a rough loss estimate to prepare for moves ahead of releases.
Calculate the value of 1 pipFAQ
Q.What should I look at on an economic calendar?
First look at three things: release time, country and importance. Narrowing down to high-importance indicators that relate to the currencies you trade makes it easier for beginners to follow.
Q.What time is the US jobs report released in Japan time?
It is generally released at 8:30 US Eastern time, which is 21:30 Japan time in summer time and 22:30 in winter time. Dates differ by month, so always check the calendar.
Q.Should I avoid trading around economic releases?
It is not an obligation, but spreads can widen and slippage is more likely, so beginners are safer sitting out or reducing their lot size. The final decision is yours.
Q.Can I still receive cashback around economic releases?
Eligibility conditions differ by broker, so check the official page. Return amounts are not yet confirmed, and we will post them on each broker's page at launch.
This article is for information purposes only and is not investment advice. Conditions may change, so please check each broker's official page for the latest information. Offshore FX and CFD trading carries a risk of losses exceeding your principal.
