News Trading
News trading takes positions around scheduled data releases, where volatility is highest and the fastest moves happen.
News trading takes positions around scheduled releases like NFP and rate decisions, where the biggest and fastest moves happen. The edge is in the reaction to the surprise, not the prediction, and costs widen sharply.
News trading is the practice of trading around scheduled economic releases, central bank decisions and other high-impact events. These events produce the largest and fastest moves in forex, but also the widest spreads, worst slippage and most unpredictable reactions. The edge in news trading comes from understanding what the market has already priced and how it will react to a surprise, not from predicting the number.
How It Works
- Releases hit at set times on the economic calendar
- Spreads widen and liquidity thins for seconds to minutes around the release
- Price can spike both ways before establishing direction
Trading Tips
The market trades the surprise versus consensus, so know the forecast
Avoid market orders into the release - slippage on stops and entries is brutal
Many professionals trade the re-action after the initial spike, not the spike itself
Related Terms
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