Avoid, wait or trade: three approaches

You know what a release does to prices, spreads and stops. You still have to decide, before 13:30, what you will be doing at 13:30.

Three approaches on one chart

EUR/USD · 1-minute · US jobs report (NFP) at 13:30 UK · illustrative

$5,000 account risking 1% ($50). Before the release: long 0.20 lots from 1.0850, stop 1.0825 (25 pips × $2 = $50).

Hold through itStay flatTrade the aftermathHalf size through it

Hold through it. The release candle fell from 1.0855 to 1.0810 in one minute while the spread widened to 6 pips. There was no price at 1.0825 to fill your stop, so it filled at 1.0811, 14 pips worse. Loss: 1.0850 − 1.0811 = 39 pips × $2 = $78, not the $50 you planned.

Position0.20 lots long

Result−$78

Of account−1.56%

In R (1R = $50)−1.56R

Trade-off: You stay in for the move you hoped for, but your stop no longer caps the loss at 1%.

Stay flat. You closed the long at 1.0855 at 13:29, a minute before the release: 5 pips × $2 = $10. No position through the spike, the 6-pip spread or the whipsaw, and none in the fall that followed.

PositionFlat from 13:29

Result+$10

Of account+0.20%

In R (1R = $50)+0.20R

Trade-off: You missed the move but avoided the chaos. The cost is opportunity, not money.

Trade the aftermath. No position through the release. You waited 15 minutes for the spread to return to 0.8 pips and the whipsaw to settle. At 13:45 price came back to retest the broken spike low and you sold 0.20 lots at 1.0812, stop 1.0837 (3 pips above the post-release high of 1.0834: 25 pips × $2 = $50), target 1.0762 (50 pips × $2 = $100). The target was reached at 14:00.

Position0.20 lots short

Result+$100

Of account+2.00%

In R (1R = $50)+2.00R

Trade-off: You give up the first 45 pips, and many retests never come or fail. Here the setup worked, with a normal spread and the planned 1% risk.

Half size through it. Same spike, same 1.0811 fill, same 39 pips. At 0.10 lots a pip is worth $1, so the loss is 39 × $1 = $39: inside your $50 budget even with 14 pips of slippage.

Position0.10 lots long

Result−$39

Of account−0.78%

In R (1R = $50)−0.78R

Trade-off: Half size leaves room for slippage, but any gain from holding is halved too.

Illustrative 1-minute EUR/USD chart around a US jobs report. Tap Stay flat, Trade the aftermath and Half size through it, then compare each with Hold through it.

The Trading around news lesson set out the options. Here they are with their costs, from the most cautious to the least.

1. Stay flat. Close or avoid positions in the affected pairs from about 15 minutes before the release. Your risk from the release is zero. The cost is opportunity: moves you miss, and swing trades you close early that would have run. We suggest this as the default for high-impact releases in your first year of live trading.

2. Wait for the first move to settle. No position through the release. Trade afterwards only when three things are true: at least 15 to 30 minutes have passed, the spread is back near normal (within about 1.5 times its usual size), and a post-release range has formed whose high or low gives you a stop. The costs: you miss the first move, many days give no clean setup, and the stop is wider, so the position is smaller for the same risk. A press conference or a second release can still start another move.

3. Trade it with reduced size. Hold or open a position through the release, but size it so the stop plus a slippage allowance fits your risk per trade. The cost: any gain is smaller, and the allowance is an estimate, not a cap. A large surprise can slip further.

None of the three has a proven edge on its own. Choose by what you can afford to give up, and decide before the day.

Try it

What would you do?

It is Friday, one hour before the US jobs report. You hold a swing long of 0.20 lots of EUR/USD from 1.0790. Price is 1.0850 and your stop is at 1.0820, which locks in 30 pips. Your plan says nothing about news. What do you do?

Keep the full position and stop as they areClose half, keep the rest with the same stopMove the stop up to 1.0845 to protect more of the profitAdd another 0.20 lots before the number

Look at which choices were decided by the plan and which by the minutes left. Then write your choice into the plan.

Quick check

Quick check

1. Question 1 of 4

   Which is a sign that the first move has settled enough to consider a trade?

   AThe spread is back near normal and a post-release range has formedBThe first candle closed in the direction of the surpriseCThe release was two minutes ago

Go deeper: Non-farm payrolls and forex · Slippage in forex: what it is and how to limit it