Best Forex Brokers
Beginners
Day Trading
Swing Trading
Scalping
HFT Brokers
Hedging Brokers
NDD Brokers
Gold Brokers
No Min Deposit
United States
United Kingdom
Australia
Europe
UAE/Dubai
Singapore
Canada
South Africa
Key Takeaways
- Definition: Trading based on economic news releases and their impact.
- High Risk: Spreads widen, slippage increases, whipsaws common.
- Key Events: NFP, interest rates, CPI, GDP are major movers.
- Actual vs Forecast: Markets move on surprise, not the number itself.
- Best Practice: Beginners should avoid trading during news releases.
Table of Contents
What is News Trading?
News trading involves taking positions before, during, or after major economic releases to profit from the resulting volatility. It's one of the most exciting but also most dangerous trading approaches.
Major News Events
| Event | Currency | Impact |
|---|---|---|
| Non-Farm Payrolls (NFP) | USD | Highest volatility monthly event |
| Interest Rate Decisions | All | Major trends start here |
| CPI (Inflation) | All | Rate expectations driver |
| GDP | All | Overall economic health |
| Central Bank Speeches | All | Forward guidance hints |
News Trading Strategies
- Straddle: Place pending orders both directions, catch whichever triggers.
- Fade the Move: Wait for initial spike to exhaust, trade the reversal.
- Post-News: Wait 15-30 minutes for dust to settle, trade the trend.
- Pre-Position: Take position based on forecast bias (very risky).
Risks and Challenges
- Spread Widening: Spreads can expand 10x+ during news.
- Slippage: Orders fill far from requested price.
- Whipsaws: Price spikes one way then reverses violently.
- Stop-Hunting: Both stops hit in volatile conditions.
Using Economic Calendar
Always check the economic calendar before trading. Know what events are coming and their expected impact.
Frequently Asked Questions
What is news trading in forex?
Trading around economic releases to profit from high volatility.
Is news trading profitable?
Can be, but highly risky. Many traders lose money due to spreads and slippage.
What is NFP?
Non-Farm Payrolls—US employment report. Biggest monthly forex event.
Should beginners trade news?
No. Stay flat during high-impact news until you have experience.
Why do spreads widen during news?
Liquidity providers pull back due to uncertainty, reducing available quotes.
What is straddle trading?
Placing pending orders both directions before news, catching whichever triggers.
What is fade the move?
Waiting for initial news spike to exhaust, then trading the reversal.
How far do prices move on NFP?
EUR/USD can move 50-150 pips on surprise NFP. Sometimes more.
What is economic calendar?
Schedule of upcoming news releases with forecasts and impact ratings.
Should I close positions before news?
Often wise. Or at minimum, reduce position size and widen stops.
What is actual vs forecast?
Markets move on surprise (actual minus forecast), not the absolute number.
What is a whipsaw?
When price spikes one direction then violently reverses, stopping out both bulls and bears.
