1. Understanding the Impact of News on the Market (News Impact Concept)
⚡ Concept: Major economic data acts as “fuel,” driving prices sharply and rapidly in a matter of moments.
⚠️ Risk: High liquidity and sharp volatility can lead to slippage and easily trigger stop-losses.
2. The Economic Calendar: A Trader’s Compass (Economic Calendar)
📅 Tool: Use sites such as ForexFactory or Investing to check the release times of high-impact news (red flags).
🎯 Goal: Know when the data will be released to avoid surprises or prepare to execute a precise strategy.
3. Strategies for Trading the News (Trading Strategies)
🛡️ Stay Out (The Pro Approach): The golden rule for professionals is to close open trades 15 minutes before high-impact news and stay on the sidelines.
🏹 Wait for the Reaction: Don’t trade as soon as the news is released. Instead, wait for the storm to pass, identify the liquidity sweep area or the resulting FVG, then trade in the new direction.
4. High-Volatility Traps (High Volatility Traps)
🪤 The Problem: Major fakeouts (whipsaws) surge up and down violently, hitting both sides’ stops (buyers and sellers) before settling into one direction.
5. The Professionals’ Secret: Capital Protection Comes First (Capital Protection)
🧘 The Wisdom: Staying out of the market during violent news events is itself a “successful trade.” Your capital is your only weapon, so don’t put it into a random battle.
How can you protect your account from volatility caused by major economic news?
The difference between technical analysis and market news:
Technical analysis gives you probabilities, while major news (such as the U.S. Federal Reserve or CPI inflation reports) can erase the chart and redraw it in a matter of seconds. Trading during the release of high-impact news is pure “gambling.”
The “Stay on the Sidelines” Rule:
The amateur trader tries to enter the market when news is released, hoping for quick profits, but often ends up suffering heavy losses due to slippage and widening spreads. The professional closes their screen or simply watches.
Seizing the Opportunity After the Calm:
After the news hits the market, sweeps liquidity violently, and creates new gaps (FVGs), it’s the smart trader’s turn. Wait for the storm to calm, identify the new direction of price, then enter in the confirmed trend.
