Using the Economic Calendar: Timing, Earnings, and Protecting Open Trades

The economic calendar is one of the most underused tools in a trader's arsenal. It's not just for spotting upcoming interest rate decisions — used properly, it tells you when a position you already hold could be about to gap sharply, and when a normal stop loss won't protect you the way you think it will.

What the Calendar Is Good For

IG's economic calendar covers the obvious events — interest rate decisions, inflation data, GDP releases, central bank speeches — but I use it just as often for individual stock earnings dates, both UK and US. Looking ahead over the coming weeks for confirmed earnings dates on stocks I'm watching, or already hold, is part of my regular routine, not an occasional check.

I also use Sharepad alongside it for up-to-date company and market information — but IG's calendar has the advantage of being right there on the platform I'm already trading from.

The Trade You're Already In Is the One at Risk

It's easy to think of the calendar as something you check before opening a new trade. But it matters just as much — arguably more — for positions you already hold, especially ones sitting in a healthy profit.

A stock announcing earnings can move sharply in either direction — sometimes gapping well beyond where a normal stop loss would have closed you out. If a good result isn't well received, or a strong result still misses inflated expectations, a profitable position can hand back its gains overnight, before the market even opens the next morning.

Guaranteed Stops Around Earnings: What to Actually Expect

This is the part most traders don't think about until it costs them. If you close a position ahead of earnings and want to re-enter with a guaranteed stop in place, the minimum distance IG will allow between your entry and your guaranteed stop widens considerably around an earnings date — often a long way from where you'd normally place a stop.

That's not IG being overly cautious for no reason — stocks genuinely can and do gap 20-30% or more on an earnings surprise, and the guaranteed stop pricing reflects that real risk.

Adjusting Position Size for a Wider Stop

If the minimum guaranteed stop distance is forced much wider than your usual stop, and you still want to keep your risk at the same percentage — say, 0.3-0.5% — your position size has to come down to compensate. A wider stop with an unchanged stake means more pounds at risk if it's hit; the Position Sizer exists exactly for working out the correct stake once you know the real stop distance.

In my view, taking the wider guaranteed stop is usually the right call around earnings, even though it means trading a smaller size — the alternative is a standard stop that may not protect you at all if the stock gaps hard.

Bringing This Back to the Formula

None of this replaces the mathematical framework — it sits alongside it. The Drawdown Defender's infinite Monte Carlo simulations stress-test your parameters against random sequences of wins and losses, but an earnings gap is a different kind of risk entirely: a single, sudden, event-driven move rather than a normal losing streak. Knowing the calendar, understanding guaranteed stops, and sizing correctly around wider stop distances is how you manage that specific risk — on top of, not instead of, the systematic approach everywhere else in the Formula.