Trading strategies · Intermediate

Trading Around News And Economic Events

The most important thing about event trading is that the numbers you planned with are not the numbers you get.

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

In short

Trading around news means accepting different execution mechanics for a few minutes: spreads widen, fills drift, and a stop can execute well beyond its level. A EUR/USD spread of 0.8 pips can reach 3 or 4 around a release, turning a planned 20-pip risk into a 35-pip loss. The workable approaches are standing aside, trading the reaction once it settles, or holding through with reduced size.

What to remember

Slippage makes the planned stop optimistic. A 20-pip stop filling at 35 is a 75% overrun with no mistake made.
The first move reacts to the headline number and the second to what it means, which is why a 60-pip spike can close 40 pips the other way.
Tighten the size, not the stop. A tight stop in a fast market is the one most likely to be filled at a bad price.
Price responds to the gap between the outcome and what was already priced in, which is not directly observable, so the reaction is not forecastable from the data.

Lesson 15 of 24 in Trading strategies

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What happens to a 0.8-pip spread at half past one

Trading around news means accepting a different set of mechanics for a few minutes. The chart still shows candles, but the conditions underneath them change enough that ordinary assumptions about execution stop holding.

Take a US inflation release at 13:30 London time. In the seconds around it, a EUR/USD spread that has been 0.8 pips all morning can widen to 3 or 4 pips, and briefly further on thinner platforms. A stop-loss order sitting 20 pips away is filled not at 20 pips but wherever the next available price is, which in a fast move might be 33 or 35. A 20-pip planned risk becomes a 35-pip actual loss, a 75% overrun, and no error was made.

That is the single most important thing to understand about event trading: the numbers you planned with are not the numbers you get. Everything else follows from it.

Why the first move so often reverses

The initial reaction to a release is frequently mechanical. Automated systems parse the number and transact within milliseconds, moving price before any human has read the detail. What follows, over the next few minutes, is the market absorbing context: the revision to last month's figure, the composition of the data, how it sits against what was already priced in.

That is why a release can spike 60 pips one way and close 40 pips the other way within a quarter of an hour. The first move is a reaction to the headline number. The second is a reaction to what the number means, and those two are frequently different. A trader entering on the spike is trading the first without knowing the second.

Three defensible approaches, and what each gives up

Approach	What you do	What it costs
Stand aside	Flatten or reduce before the release, re-enter later	Missing genuine moves, and paying to exit and re-enter
Trade the reaction	Enter after the initial spike settles, in the direction that holds	Entering 30 to 60 pips into the move, with a wider stop
Hold through	Keep an existing position, sized for the event	Accepting gap and slippage risk on the stop

Notice what is absent: entering immediately on the number, or placing orders on both sides just before it. Both are common and both are badly served by the mechanics above, because widened spreads and slippage apply to entries as well as exits, and a straddle frequently fills both sides during a spike that reverses.

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Sizing for an event rather than for a normal day

If the same 1% of equity is risked on an event trade as on a quiet one, the actual risk is larger, because the realised loss can exceed the planned stop distance. The adjustment is straightforward and it is arithmetic rather than judgement.

Assume the stop fills worse than its level. Building in an extra 50% to 100% is not pessimistic for a major release.
Size so the worse-case fill is still within your normal per-trade risk, which means a smaller position than usual, not the same one.
Widen the stop to sit beyond the noise rather than tightening it, then reduce size to compensate. The position size calculator makes that trade-off explicit.

The instinct in volatile conditions is to use a tighter stop because the move could be large. That gets it backwards: a tight stop in a fast market is the one most likely to be hit at a bad price.

Knowing what is scheduled before the session starts

Most of the damage from news is done to traders who were not expecting it. A position opened at 13:25 on technical grounds, five minutes before an inflation print, is an event trade whether the trader intended it or not.

The routine that prevents this takes two minutes: check the calendar before the session, note the times of anything high-impact on the currencies you trade, and decide in advance whether you will be flat, reduced or holding through each one. Rate decisions, inflation prints and employment reports are the reliably disruptive ones, and central bank press conferences often move price more than the decision that preceded them. The relevant session overlaps matter too, since a release landing during thin liquidity produces larger dislocations than the same release at a busy hour.

What no approach can remove

The direction of the reaction is not predictable from the data, even when the data is exactly as forecast. A strong number can weaken a currency if the market had positioned for something stronger still. A weak number can strengthen one if attention shifts to a different component of the release. Price responds to the gap between the outcome and what was already priced in, and what was already priced in is not directly observable.

That is worth sitting with, because it undercuts the entire idea of forecasting the reaction. The achievable goal is narrower: know when the events are, decide your exposure in advance, size for execution that is worse than planned, and treat the minutes after a release as a period to observe rather than a period to act. Being deliberate about volatility rather than surprised by it is the practical benefit of watching the calendar at all.

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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

Trading Around News And Economic Events: questions

Should you trade during news releases?

Many traders do not, and standing aside is a perfectly coherent choice rather than a cautious one. If you do trade around releases, the mechanics change enough that position sizing has to assume worse execution than normal, and entering on the initial spike is the approach least supported by how those first seconds actually work. The alternative most people settle on is waiting for the initial reaction to resolve and trading what holds.

Why does the market move opposite to good news?

Because price reflects what participants had already positioned for, not the number in isolation. If a strong figure was widely expected and something even stronger was priced in, the release can disappoint despite being objectively good. Attention can also shift to a secondary component of the data, such as a revision to the previous month, which changes the interpretation entirely.

How much do spreads widen during news?

It varies by broker, instrument and liquidity, but a major pair that trades at under a pip during normal hours can reach several pips in the seconds around a high-impact release, and less liquid pairs widen further. The widening applies to entries as well as exits, which is why strategies that place orders on both sides of a level before a release tend to perform worse in practice than on paper.

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