The moment is ringed. An invented chart, drawn to show the shape. Not market data.
Also searched astrading the news · NFP volatility · rate decision forex · spread widening news
What you see
- Spreads widen in the seconds before and after.
- A very large candle, often with long wicks both ways.
- Orders filled at prices away from those requested.
Why it happens
The first move is frequently reversed, in part or in full, as the detail of the release is read. The number itself matters less than how it compares with what was expected, and that is not known until it arrives.
What traders check next
- The calendar, every morning: what is due, and when, in your own time zone.
- Whether an open position has its stop inside the range such a release usually produces.
- Whether to be in the market at all for those minutes. Standing aside is a position.
Where people go wrong
- Placing a tight stop just before a release.
- Guessing the number and the reaction: two guesses, both needed.
- Entering in the first seconds, at the widest spread of the day.
Questions people ask
- Why does the spread widen at a news release?
- Those who quote prices face more risk and quote less tightly, and for a moment there are fewer of them.
- Is it better to trade before or after the news?
- That is a decision for each trader. What can be said is that cost and slippage are highest in the first moments.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern or a situation described here says nothing certain about what a price will do next.