High-impact news creates the biggest, fastest moves of the week. For some traders that's an opportunity; for most, it's the moment accounts get hurt. The key is to choose your approach before the release, not during it.
Three approaches
| Approach | How it works | Suits | Risks |
|---|---|---|---|
| Stay out | Be flat a few minutes before and after | Most traders, and most prop firm evaluations | Missing the occasional big move |
| Trade the reaction | Wait for the spike to settle, then trade the structure that forms | Structure and SMC/ICT traders | False starts in the settle phase |
| Trade the release | Position before, or enter in the first seconds | Specialists with fast execution | Slippage, spreads, whipsaws |
Trading the reaction
- Mark key levels and liquidity before the release.
- Let the first 5 to 15 minutes play out. The initial spike often runs liquidity on both sides.
- Look for a structure shift after the spike, in the direction the data supports.
- Enter on the pullback, with normal size and a stop beyond the post-news swing.
Protecting open trades
- Take partial profits or close before a release if you're in profit and don't want the risk.
- A stop doesn't guarantee its price during news. Expect slippage, and size so a gap through your stop is survivable.
- Don't widen stops into news to "give it room"; that turns a planned risk into an unplanned one.
Key takeaways
- Decide before each release whether you'll stay out, trade the reaction, or trade the release itself.
- The first seconds are a spike in both directions; the tradeable direction usually emerges afterwards.
- Stops can slip during news; size so a gap is survivable and never widen stops into a release.
- Check prop firm news rules; many restrict trading around high-impact events.