Risk management · Intermediate

Managing Risk Around News Events

News risk is one of the few risks you can see coming, which makes being surprised by a scheduled release a planning failure rather than bad luck.

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

In short

Around high-impact releases spreads widen, market depth thins and price often moves both directions before settling, so stops fill worse than requested and a correct view can still lose. The main options are closing before the release, reducing size, or widening the stop while cutting size to keep cash risk constant. Check an economic calendar before each session and decide in advance.

What to remember

A widening spread can trigger a stop without price moving, because longs exit on the bid and shorts on the ask.
Widening a stop without reducing size increases the money at risk at the exact moment volatility rises.
The reaction depends on the surprise relative to consensus, not on whether the number was good in absolute terms.
The largest move often arrives with the commentary rather than the data, which is why press conferences matter as much as decisions.

Lesson 15 of 22 in Risk management

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What changes when a release lands

Scheduled high-impact news changes the mechanics of the market for a few minutes, and it changes them in ways that damage a position even when your directional view turns out to be right. The risk profile of every open trade is different at 13:29 than it was at 13:25, whether or not you did anything.

Three things happen more or less at once. Spreads widen as liquidity providers pull back from the uncertainty. Depth thins, so the same order size moves price further. And price frequently travels in both directions before settling, which means a level can be touched and reversed within seconds. None of this is a malfunction. It is how a market prices a genuine unknown, and it is entirely predictable in timing if not in outcome.

What it does to a position you already hold

Stops fill worse than requested. A stop is an instruction to exit at market once a price trades. In a thin, fast book the next available price can be several pips away, so the realised loss exceeds the planned one.
The spread alone can trigger an exit. Stops are hit on the bid for longs and the ask for shorts. A spread that widens from 1 to 12 pips moves the effective trigger point without price moving at all.
Both directions get touched. The initial spike is often reversed within the minute, which is enough to take out a stop on the correct side of the eventual move.
Targets can be jumped rather than filled. Price gapping through a level is not the same as trading through it steadily, and partial fills on larger sizes become more likely.

The options, and what each one costs

Approach	What it protects	What it costs
Close before the release	Removes event risk entirely	Gives up the position and pays the spread twice
Reduce size beforehand	Keeps exposure, shrinks the damage	Smaller gain if the move goes your way
Widen the stop	Avoids being taken out by the spike	Larger loss if the move is genuinely against you
Do nothing, stay small	Simplest, no mid-trade decisions	Only acceptable if sized for it in advance

Note that widening a stop is only defensible if you reduce size at the same time, so the cash at risk stays constant. Widening the stop alone increases the risk on the trade at the exact moment volatility is rising, which is the wrong direction on both counts. The position size calculator makes the paired adjustment quick: put in the wider stop distance and it returns the smaller lot size that keeps your risk unchanged.

There is a fifth option that deserves naming because it is the one most often taken by accident: leaving a position open with no decision at all. That is not the same as holding deliberately at a size chosen for the event, and the difference shows up in how you behave in the minutes afterwards. A held position you planned for is easy to leave alone. One you simply forgot about tends to get managed impulsively at the worst prices of the day.

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Which events matter

Not everything on an economic calendar moves markets. The releases that reliably do are central bank rate decisions and the press conferences that follow them, inflation prints, employment reports, and occasionally growth or activity surveys when the market is focused on them. A calendar's impact rating is a reasonable guide, and the drivers behind those numbers explain why the same release matters enormously in one quarter and barely registers in the next.

Two practical points are often missed. First, the reaction depends on the surprise relative to the consensus forecast, not on whether the number was good in absolute terms. Second, the largest moves often come from the commentary rather than the data, which is why a rate decision can be quiet at the announcement and violent half an hour later during the press conference.

A workable routine

Check the calendar before every session and note the times of any high-impact release for the currencies you hold.
Decide the handling in advance for each open position: flat, reduced, or held at current size. Write it down.
Avoid opening new positions in the fifteen minutes before a major release unless event trading is your tested approach.
After the release, wait for the spread to normalise before acting. The first minute is usually the worst price of the hour.
Log what happened. Over time your own record shows which events actually affect your instruments and which you have been avoiding for no reason.

One nuance on limit orders. Pending entries left sitting in the book across a release can be filled by the spike and then immediately stopped out by the reversal, which produces a loss on a trade you never consciously took. If you are not planning to be at the screen, cancel resting orders around high-impact events or move them far enough away that only a genuine move would reach them.

The underlying point is that news risk is one of the few risks in trading you can see coming. The timing is published weeks ahead. Being surprised by a scheduled release is a planning failure rather than bad luck, and a two-minute calendar check before the session removes most of it.

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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

Managing Risk Around News Events: questions

Should I close my trades before a news release?

It is one of four reasonable choices, alongside reducing size, widening the stop while cutting size, and holding a position that was small enough to begin with. Closing removes event risk entirely and costs you the position plus the spread to re-enter. The important part is deciding which approach applies before the release rather than reacting during it.

Why did my stop loss fill at a worse price during news?

A stop is an instruction to exit at market once your price trades, not a request for that exact fill. In the seconds around a major release the book is thin and prices move in jumps, so the next available price can be several pips away. This is normal slippage in fast conditions and it is one reason to size conservatively rather than at the top of your risk range.

Can I widen my stop loss before a news event?

Only if you reduce position size at the same time so the cash at risk stays the same. Widening the stop alone increases what the trade can cost precisely when volatility is rising, which moves both variables in the wrong direction. A position size calculator makes the paired adjustment straightforward: enter the wider stop distance and take the smaller lot size it returns.

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Not investment advice. Past performance is not indicative of future results.