In this article, Coach Mark will help you understand systematic “news trading” in the Forex market—from why many traders’ portfolios get wrecked during high-impact news, to how to prepare and plan safely so you can “survive the volatility.”
Common Problems Traders Face
Many traders have noticed that when major economic news is released—such as CPI, NFP, FOMC statements, or interest rate announcements—currencies and gold often spike violently within seconds. Sometimes, prices swing hundreds of pips, exciting traders to jump in immediately. However, this is actually the riskiest time to trade.
Many traders lose money during these periods because they rush to open orders while the market is still unstable, often driven by FOMO (Fear of Missing Out). This leads to unplanned trades and losses caused by sharp price movements.
Why News Matters in Forex Trading
Economic news is a primary driver of the market, as economic figures reflect the real condition of a country’s economy. Reports like NFP, CPI, FOMC decisions, or interest rate changes directly impact currencies and gold prices.
When major news is released, the market typically moves in three phases:
1️⃣ Initial Spike – The immediate reaction after the news is out. If the numbers surprise the market, the price swings sharply within seconds.
2️⃣ Correction – A temporary pullback or consolidation after the initial spike.
3️⃣ Real Direction – The market’s true direction emerges after the volatility settles, gradually moving according to the news impact.
✅ Understanding these phases helps you know “when to wait” and “when to trade.”
Preparation Before News
Preparation is the most important step in news trading:
🔹 Check the Economic Calendar to see which major news is coming.
🔹 Study the Forecast vs. Previous figures to anticipate the Actual results.
🔹 Choose currency pairs that are directly affected, e.g., USD news → trade EURUSD, GBPUSD, XAUUSD.
⚠️ Set your time zone to GMT+7 (Bangkok). Incorrect timing can cause missed opportunities or entering trades at the wrong moment.
Strategies During News
News releases bring high volatility, so you need a strategy that fits your trading style:
1️⃣ Trade Before the News: Some traders place pending orders (Buy Stop & Sell Stop) with predefined TP/SL. When the news comes out, the price moves one way or the other, allowing quick profits.
✅ Pros: If the price moves in one direction without retracing, you can earn significant profit quickly.
❌ Cons: High volatility may trigger both orders and hit Stop Losses.
2️⃣ Wait for the Market to Decide: For safer trading, wait 5–15 minutes after the news for the market to stabilize, then enter trades once a confirmation signal appears, like a Break & Retest.
✅ This method may yield smaller profits but significantly reduces risk, ideal for traders focusing on long-term survival.
Risk Management
The heart of news trading is controlling risk:
🔸 Risk no more than 1–2% of your portfolio per trade.
🔸 Adjust lot size appropriately—avoid greed for short-term gains.
⚠️ Do not set Stop Loss too tight, as prices can swing violently. Place SL according to the structure of a larger timeframe.
Conclusion: How to Trade News Safely and Profitably
🎯 News trading offers opportunities for high returns in a short time, but it also carries the highest risk.
🔑 The key is to have a clear trading plan: know where to take profit, where to accept risk, and be patient until the market shows its true direction.
❌ You don’t need to trade every news release. Focus on high-impact events (3-star or red-box news). Remember: not trading is still trading, as it helps you avoid risks that could harm your portfolio.
📌 Key lesson: Avoid greed and impatience. In news trading, discipline and patience often yield better results than rushing in without a plan.
Article by Coach Mark, RoboAcademy
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Disclaimer: Investing is risky. Investors should study the information before making investment decisions.
