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In short
News trading looks for the few seconds in which a market moves most: the publication of an economic release. Shortly before, stop orders sit on both sides of the price. The spike fills one of them.
It sounds like a trick, but at exactly that moment the market is at its most expensive. Spread and slippage are a fixed part of the sums here.
The strategy as a schematic
A drawn price path, no market data. First the case where the rule works, then the same routine when it fails.
- Closed
- ±0 pips
- Open
- –
- Open volume
- –
Schematic, no market data: a drawn price path, results in pips weighted to 0.10 lots. Not a backtest and no statement about any real EA.
How the strategy trades
- Pick a scheduled release from the economic calendar, such as labour market data or a rate decision.
- Shortly before, place a buy stop above and a sell stop below the price.
- The spike fills one of the two orders, the other is cancelled.
- Target and stop are fixed, often with a time limit: after a few minutes the trade is closed.
- Unfilled orders are cancelled after the release.
Where the risk sits
Every trade has a stop, but in the second of the release the market is thin. Orders often fill several pips worse (slippage), and the spread can multiply.
The first spike sometimes turns at once. Then the position closes at the stop, again with slippage. The actual loss is larger than the configured stop.
If price spikes both ways, both orders can fill before the program cancels the second one.
When it works, when it fails
Tends to work when …
- A release with a clear surprise that triggers a move in one direction.
- A broker with fast execution and limited spread widening.
Tends to fail when …
- A spike in both directions in quick succession (whipsaw).
- Heavy slippage that flips the ratio of target to stop.
- Brokers that widen spreads sharply or delay orders at the release.
How to recognise it in an EA
Traces in the trade log of a live account, whatever the vendor calls the EA.
- Trades only at fixed times that match dates in the economic calendar.
- Very short holding times, often under five minutes.
- Entry prices differ clearly from the order price (visible slippage).
- Long pauses between trades, sometimes only a few per month.
Typical settings
| Setting | Typical | Effect |
|---|---|---|
| Stop order offset | 5–20 pips | Tighter = more false triggers. |
| Placement | 1–5 minutes before the release | Price is measured shortly before. |
| Stop / target | e.g. 15 / 30 pips | In reality often shifted by slippage. |
| Max. slippage / spread | filter | Not every broker honours it. |
| Time limit | e.g. 5–15 minutes | Closes if nothing happens. |
Common ranges from EA manuals and set files, not a recommendation.
EAs in our tests built this way
No EA in our tests is explicitly tagged with this design yet. Many EAs combine it with other mechanics; the trade log usually shows it sooner than the product description. All EA reviews →
Related strategies
- BreakoutWaits for a quiet phase and enters as soon as price breaks through its edge.
- ScalpingMany very short trades with a small target, where spread and execution decide the result.
- MomentumEnters where price has recently moved the most and exits as soon as the move loses steam.
All strategies →All designs compared: EA strategies explained →
Frequently asked questions
Why does slippage matter so much in news trading?
Do prop firms allow news trading?
Is news trading the same as a news filter?
Video: the strategy in under a minute
The same animation as a video with subtitles, for those who prefer to watch.