Free Trading School · Level 10: Fundamentals and the News
Trading around news safely
During major releases, spreads widen, liquidity thins out and price can jump past your stop (slippage). The first move is often reversed within minutes. For most traders, the best news strategy is a defensive one.
- Check the calendar before every session and mark high-impact events.
- Avoid opening new trades in the 15 to 30 minutes before a major release.
- Decide in advance what to do with open trades: close, reduce or accept the risk.
- After the release, wait for the dust to settle and trade the reaction at key levels, not the spike.
Experienced traders sometimes trade news on purpose, but with small size and the understanding that their stop may not fill at the price they chose.
You never have to trade the news. Waiting is a position too.
Quick answers
During major releases, spreads widen, liquidity thins out and price can jump past your stop (slippage). The first move is often reversed within minutes. For most traders, the best news strategy is a defensive one.
You never have to trade the news. Waiting is a position too.
Avoid new trades just before it and plan for open trades. Spreads widen and stops can slip; plan ahead and wait for the dust to settle.
Next lesson: Risk-on and risk-off