News Trading Strategies

Economic news releases and breaking events create the biggest and fastest price movements in forex.

High-Impact Events


Tier 1 Events

• Non-Farm Payrolls (NFP)
• Federal Reserve Rate Decisions
• CPI (Inflation Data)
• GDP Reports
• Can move markets 50-200+ pips

Tier 2 Events

• Retail Sales
• PMI Data
• Employment Change
• Consumer Confidence
• Moves of 20-50 pips typical

News Trading Strategies

Straddle Strategy

1. Place buy stop above and sell stop below current price
2. Set both 15-30 pips from current price
3. Set stop loss 20 pips on each order
4. Wait for news release
5. One side triggers, cancel the other

Fade the Spike

1. Wait for initial news reaction
2. Let the spike extend for 5-15 minutes
3. Look for reversal candlestick
4. Enter against the spike direction
5. Target: 50% retrace of the spike

Post-News Trend

1. Wait 15-30 minutes after release
2. Let initial volatility settle
3. Identify the established direction
4. Enter in direction of the move
5. This is the safest news trading approach

Preparation Checklist

Before the Event

• Know exact release time
• Understand market expectations (forecast)
• Check previous reading
• Identify key support and resistance
• Reduce existing position sizes

During the Event

• Spreads widen significantly
• Slippage is common
• Do not chase the move
• Wait for your setup

After the Event

• Compare actual vs forecast
• Positive surprise = currency strength
• Negative surprise = currency weakness
• Actual vs forecast matters more than absolute number

Risk Management

Critical Rules

• Never risk more than 1% on news trades
• Accept that stops may slip
• Spreads can triple or more during news
• Some brokers restrict trading around news

NFP Trading Example

1. Check forecast vs previous
2. Wait for 8:30 AM ET release
3. Watch initial reaction (do not trade yet)
4. Wait for first 15-minute candle close
5. Enter in direction of momentum
6. Stop below the reaction low

Key Takeaways

1. Know the economic calendar
2. Preparation is more important than reaction
3. Post-news trading is safest
4. Spreads and slippage are real costs
5. Practice on demo before trading live news