Economic calendar · Intermediate

The Risks of Trading the News

The direction can be right and the trade can still lose, because a release changes the price, the spread, the fill and sometimes the margin all at once.

Last reviewed 15 September 2026 by the MarketPro research desk · Editorial policy

In short

The main risks of trading news are execution risks rather than analytical ones. Spreads widen several times over, market orders fill well past the price you asked for, and stops become market orders that can settle ten or more pips beyond their level, so a planned 25 pip loss can cost 45 pips of real money. The first move also reverses often, stopping out positions that were directionally correct.

What to remember

A correct call can still cost 80% more than planned. Eleven pips of entry slip plus nine pips past the stop turns a $125 risk into a $225 loss.
Size on the stop you expect to get, not the one you intend to set. A 25 pip stop that realistically fills 37 pips away means 0.27 lots, not 0.40.
The first eight seconds belong to machines. The tradeable opportunity for a retail account is the second move, once the detail is read and spreads normalise.
A leverage cut published days before an election can quadruple the margin on a position you already hold, taking the free margin that was absorbing every other trade.

Step 5 of 8 on Trading News Like a Pro

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Trading a scheduled release means opening a position at the one moment when price is least predictable and execution is most expensive. The direction can be right and the trade can still lose money, because a release changes four things at once: the price, the spread, the price your order actually receives, and sometimes the margin your broker requires to hold the position at all.

Right about the print, down $225 anyway

You expect the US payrolls report to beat its forecast, which is dollar positive, so the plan is a short EUR/USD at 1.0850 with a 25 pip stop at 1.0875. Half a lot puts $5 on every pip, so the planned loss is $125, or 1.25% of a $10,000 account. The forecast is 175,000 and the print is 264,000. The call was correct.

What the account records is this. Your market order leaves two seconds after the release and fills at 1.0839, eleven pips below where you wanted to sell, because the book ran before your instruction arrived. Forty seconds later the move reverses, as first moves often do, and price trades back through 1.0875. The stop becomes a market order and fills at 1.0884. The loss is 45 pips, $225, against a plan of $125.

Forty minutes later EUR/USD trades at 1.0790, sixty pips below your intended entry. The analysis was right, the direction was right, and the trade lost 80% more than the risk you signed up for. Nothing malfunctioned. Every one of those numbers is normal behaviour for a high-impact release.

Four costs land in the same two seconds

The spread widens. A major pair that costs under a pip to cross in the London afternoon can cost six to ten pips for the first half-minute, and the widening begins before the release rather than after it. On gold the usual 25 cents can become $2 or more.
Entry slips. A market order is an instruction to take whatever the book offers. During the first seconds the book is thin and moving, so the fill can sit ten or fifteen pips from the last price you saw.
The stop slips too. What the level buys you is an exit, not that exit's price, and this charge lands on top of the entry slip rather than instead of it.
The first move reverses. The initial spike is frequently faded within a minute as the detail inside the report gets read, which stops out positions that were correct about the eventual direction.

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The stop distance you typed was never your real risk

Position sizing rests on one assumption: that the loss equals the stop distance multiplied by the pip value. In calm hours that holds to within a fraction of a pip, which is why the position size calculator gives an answer you can trust. Around a release the assumption breaks, and it breaks in the direction that costs you.

The practical fix is to size on the stop you expect to get rather than the stop you intend to set. If a 25 pip stop realistically fills 12 pips past its level on a three-star release, size the position as though the stop were 37 pips. On a $10,000 account risking 1%, that is 0.27 lots instead of 0.40. Run the two through the pip calculator and the difference in what a bad fill costs is the whole argument.

You are not the fastest reader in the room

The first move after a release is not a human opinion. Machine readers parse the published figure in a few milliseconds and trade it before a person has finished reading the headline number. By the time a retail platform has drawn the candle, the obvious interpretation is already in the price.

That is not a reason to give up on news, but it does change what the opportunity is. The edge available to a retail account is almost never speed. It is patience: the second move, thirty to ninety minutes later, once the detail in the report has been digested and the spread has normalised, is tradeable with ordinary tools. The first eight seconds are not.

Margin rules change before the event, not after

The cost of holding a position is not fixed either. Leverage reductions are published days ahead of an election or a referendum, and they bite hardest on the instrument the event is about, so an index or a single currency can drop from 20:1 to 5:1 while everything else on the platform is untouched. A holding that tied up $400 of margin then ties up $1,600.

The charge itself is not the danger. The extra $1,200 comes out of the free margin that was absorbing the open loss on everything else you hold, so an account that looked comfortable on Friday can sit one ordinary candle away from an automatic close-out on Monday with nothing having happened to price. The leverage calculator shows the requirement at each step, and the moment to look at it is when the notice arrives rather than when the margin call does.

Constraints worth setting before you take the trade

If you are going to be in the market through a release, decide these in advance rather than in the moment:

A size that survives a fill 50% worse than planned. Half your normal size is the usual answer.
A maximum number of event trades per week, because event risk is the easiest kind to accumulate without noticing.
A rule for the first sixty seconds. Either you are already positioned or you wait. Chasing a candle that has already moved 40 pips is the single most expensive habit in this category.
A log of requested price against filled price on every news trade, kept with the rest of your risk records. After twenty trades the log will either justify the activity or settle the argument.

Most people who examine that log honestly conclude that their edge was never in the release itself. That is a useful thing to find out from twenty small trades rather than from one large one.

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Written and reviewed by the MarketPro research desk

MarketPro is a trading-signal and trading-education app operated by Harajuku Holdings LTD (Cyprus). Our signal desk publishes and tracks every trade idea in-app, and every page here is checked against the app's live behaviour before publishing. Last reviewed 15 September 2026. How we produce signals and content · About MarketPro

FAQ

The Risks of Trading the News: questions

Is trading the news profitable for retail traders?

Some traders do it consistently and most who try it do not, because the costs are concentrated in exactly the seconds they want to trade. The honest test is to log requested price against filled price on twenty news-adjacent trades and compare the total execution cost with the total result. That measurement tells you more about your own edge than any general claim about news trading, and it costs very little to run at reduced size.

Should I close my positions before a high-impact release?

Going flat removes event risk entirely, and it removes the favourable half of the distribution with it, which is a price rather than a saving. A common middle path is to halve the position ahead of a three-star release so that an unusually bad fill is survivable rather than material. What matters is that the exposure is a deliberate decision made in advance, not something you discover afterwards.

Why did my stop loss cost more than the distance I set?

Because the level you set is a trigger rather than an exit price. When price touches it the order goes to market and takes whatever is resting there, and in the first seconds after a release very little is. A 25 pip stop settling nine or ten pips past its level is ordinary behaviour rather than a fault, which is why the distance to size on is the fill you expect rather than the number you typed.

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