A trade plan can be right about direction and still lose more than planned because of when it was placed. Around a scheduled economic release, the market you trade does not behave like it did an hour earlier: the spread widens, fewer orders sit near the price, and a stop can be filled well past its level.
None of that shows on a normal chart. This guide explains what changes around news, why a stop can trigger before the chart touches it, and how to plan a trade so a release cannot turn a 1R loss into a much larger one.
What changes when the news hits
The spread widens
The spread is the gap between the price you can buy at (ask) and the price you can sell at (bid). In normal hours on a major pair or on gold it is small. In the seconds before and after a big release, liquidity providers pull or widen their quotes because they do not want to be caught on the wrong side, so the spread your broker shows can become many times its usual size for a short while. Watch it on your own platform during the next release: that is the only number that matters for your account.
Liquidity thins out
Fewer orders sit close to the price. A market order, or a stop that becomes a market order, has to travel further through the order book to be filled.
Price can jump
When the number is a surprise, price can move several levels in one tick. On the chart this looks like one huge candle; in practice there may have been no tradable price in between.
Slippage
Slippage is the difference between the price you asked for and the price you got. A normal stop loss is an instruction to close at market once the level is touched. In a fast move, the next available price can be far beyond the stop. Slippage can also go in your favour, but around news the unfavourable kind is the one that hurts a plan.
Why a stop can trigger before the chart reaches it
Most retail charts (MetaTrader, many broker apps, most TradingView feeds) draw the bid price. That matters for short trades:
- A long position is closed by selling, at the bid. The chart shows the bid, so the stop triggers when the chart reaches it.
- A short position is closed by buying, at the ask. The ask sits above the bid by the spread, so the stop triggers when the ask reaches it, which happens before the chart line does.
Made-up example: you sell EUR/USD at 1.0850 with a stop at 1.0870. The usual spread is about 1 pip. At a release the spread jumps to 8 pips while the bid rises to 1.0862. The ask is now 1.0870, your stop is hit, and the chart never printed 1.0870. Looking back at the candle, it seems the stop was "hunted". It was the spread.
Which releases to know
The exact list depends on your market, but these scheduled releases move most dollar pairs, gold and often indices and Bitcoin:
- US nonfarm payrolls (NFP), usually the first Friday of the month.
- US CPI inflation, monthly.
- Central bank rate decisions: the Fed (FOMC), the ECB, the Bank of England, the Bank of Japan, and the press conference that follows each.
- GDP and retail sales for the currency you trade.
An economic calendar with times in your own time zone shows them a week ahead. Most calendars mark the expected impact; treat the high-impact ones as part of your plan, not as surprises. Unscheduled news (a central banker's comment, a geopolitical headline) cannot be planned, which is one more reason every trade needs a stop. For gold, the gold trading sessions guide covers the US release times; for currency pairs, see the forex session times.
Four ways to plan a trade around news
1. Stand aside
Do not hold a new position into a high-impact release, and wait until the first candle after it has closed and the spread is back to normal. This is the simplest rule and costs only the occasional missed move.
2. Close or reduce before the release
If a trade is already open, decide before the release: close it, take part of it off, or move the stop to break-even if price has room. Write the choice in the plan when you enter, not two minutes before the number.
3. Smaller size, wider stop
If you want to hold through the news, the stop has to sit beyond the noise of the release, which usually means further away. Keep the risk in money the same by cutting the size, as in position sizing. The plan then survives normal spikes, and slippage costs a smaller share of the planned risk.
4. Trade the reaction, not the number
Wait for the release candle to close, then treat the new high and low as levels like any other. A break and hold of one of them is a setup; the first spike is not.
Worked example: same risk, different exposure to slippage
A made-up gold trade, to show the arithmetic, not a real result. Account $1,000, risk 1 percent, so $10 per trade. On many brokers 0.01 lot of XAU/USD is 1 ounce, so a $1 move is $1 per 0.01 lot. Check your broker's contract size before using these numbers.
| Plan | Stop distance | Size | Planned loss | Fill $3 past the stop |
|---|---|---|---|---|
| Tight stop into the release | $2.50 | 0.04 lot | $10 | $22, or 2.2R |
| Wider stop, smaller size | $10 | 0.01 lot | $10 | $13, or 1.3R |
Both plans risk $10 on paper. With the same $3 of slippage, the tight plan loses more than twice its planned risk, the wide plan 1.3 times. And the tight stop is far more likely to be touched by the spike in the first place. Around news, a tight stop with a big size is the plan that breaks.
Mistakes to avoid
- Placing a tight stop just before a release. It is likely to be touched by the spike alone, whatever the final direction.
- Judging a stop-out by the candle. Check the spread at that minute before deciding the level was wrong.
- Forgetting the release time. A trade opened at 13:25 UTC on a CPI day is a news trade, whether you meant it or not.
- Moving the stop away during the spike. That turns a planned loss into an open one.
FAQ
Why did my stop loss get hit when the chart did not reach it?
Most charts show the bid price. A short position closes at the ask, which is higher by the spread. When the spread widens at a release, the ask can reach your stop while the chart's bid line stays below it.
Is it better to avoid trading the news?
For most traders who plan from the chart, standing aside until the first candle after a high-impact release closes is the simplest rule. If you do hold, use a wider stop with a smaller size so the risk in money stays the same.
Can a guaranteed stop prevent slippage?
Some brokers offer guaranteed stop losses, usually for a fee or a wider spread, and not on every market. They fill at the stop price even through a gap. Read the broker's terms before relying on one.
How long does the spread stay wide after a release?
It varies by market, broker and how big the surprise was. Measure it yourself: watch the spread on your platform during the next two or three releases and write down how long it takes to return to normal.
Does this apply to crypto?
Crypto has no scheduled releases of its own, but US inflation and rate decisions often move Bitcoin too, and order books on smaller coins are thin at any time. The same rule applies: know the time, size for the spike, and do not set a tight stop just before it.
Plan the trade before the number
Have a chart and a release coming up? Upload the screenshot to ChartEdge AI to get the trend, key levels, a stop beyond invalidation and the size for your risk, then decide whether to hold through the news before you enter. 3 free analyses, no card required. Educational only, not financial advice.