News
What we'll learn
- How to be aware of upcoming economic news releases and earnings reports
- How to use the news calendar or earnings report website
- How to understand which news releases affect which instruments, and how much potential move to expect
9 phrases to know
- Economic Indicators: Statistical data points that provide insights into the health and performance of an economy.
- Central Bank Decisions: Central banks can really move the market with their monetary policy and statements. This is a massive one to keep an eye on.
- Non-farm payrolls (NFP): Monthly employment report released by the US Bureau of Labour Statistics. Used to be the biggest event of the month, but has been superseded by interest rate decisions and inflation data (as of 2023).
- Interest Rate Decisions: Currently the most market-moving events. When rates have been moving regularly, markets go wild - particularly if the decision is different from expectations.
- Inflation Data: Inflation measures the rate at which prices for goods and services are rising. Currently a hot topic that can make even 2-star events move markets significantly.
- Gross Domestic Product (GDP): A key measure of economic activity representing the total value of goods and services produced within a country. A strong GDP often means a strong currency.
- Speeches by Government Officials: If an official gives a more hawkish (or dovish) response than previously, it can signal policy changes and cause big market reactions. You need to know when these are happening to avoid trading during them.
- Geopolitical Events: Wars, elections, trade disputes - all can have massive impact on currencies and indexes.
- Economic Calendar: Lists economic events and releases with dates and times. No excuse for not knowing what's coming up.
Use an economic calendar
- https://www.forexfactory.com/calendar/
- https://www.investing.com/economic-calendar-/
- https://www.fxstreet.com/economic-calendar
For earnings reports
- Trading View
- https://seekingalpha.com/earnings/earnings-calendar
- https://www.benzinga.com/earnings
- https://www.investing.com/earnings-calendar/
Holiday Blackout Period
Do not trade between December 15 and January 15.
During this period:
- Low liquidity due to institutional traders on vacation
- Erratic price movements
- Wider spreads
- Patterns are less reliable
If you choose to trade during this period, stick to low-spread instruments only.
When not to trade (news events)
Forex & Commodities
| Timeframe | News Stars | Hours to Block | Notes |
|---|---|---|---|
| 15 minute | 2 or 3 | 3 | Both 2-star and 3-star matter |
| 1 hour+ | 3 only | 8 | 2-star events get "soaked up" by the larger timeframe |
Stocks
| Timeframe | Event Type | Hours to Block |
|---|---|---|
| 1 hour | Earnings | 48 |
| 4 hour | Earnings | 48 |
Important caveats
-
USD 3-star events affect virtually everything - not just USD pairs. If there's a big US release coming, it will likely affect all currency pairs, commodities, and indexes.
-
Hot topics can elevate 2-star events - If inflation is currently a hot topic, even a 2-star inflation-related release can rock the markets. In six months, it might be something else. Use judgment and experience.
-
EUR events often affect GBP and CHF - They're reasonably well correlated.
Forex Factory color coding
- Yellow = 1-star (low impact) - ignore
- Orange = 2-star (medium impact)
- Red = 3-star (high impact)
Filter settings
- Filter for this week (not just today) - this lets you see overnight releases
- Filter out 1-star/yellow events
- Filter countries to only those relevant to your trading
Why avoid news?
Institutions love to use economic news to find liquidity for their trades:
- They know trade volume increases around news events
- They push price in one direction to take out stops
- They fill their big orders using that liquidity
- Then they move price strongly in the other direction
This creates whipsaw price action - price moving strongly one way, then reversing. You can be right about the eventual direction but still get stopped out. Spreads also widen around news events, making stop-outs more likely.
Key points
- Be aware of upcoming news releases and earnings reports
- Use a good economic news calendar (Forex Factory, Investing.com, FX Street)
- Understand which releases affect which instruments - USD affects almost everything
- Higher timeframes = look further ahead (trades take longer to play out)
- Experience counts - the more you observe price reactions to news, the better you'll get
- Use a checklist before entering trades - checking for news should be on it
- Don't let this paralyze your trading - these are guidelines, not absolute rules
TradingView tip
On TradingView, the chart itself shows when the next earnings date is for stocks - displayed as a point at the bottom of your chart. Very useful for avoiding earnings surprises.
News Decision Flowchart
Use this flowchart to determine what action to take regarding news events.
┌─────────────────────────────────────────────────────────────────────────────┐
│ NEWS EVENT DECISION FLOWCHART │
└─────────────────────────────────────────────────────────────────────────────┘
START: What instrument class are you trading?
│
├─► STOCKS ──────────────────────────────────────────────────┐
│ │
│ Is there an EARNINGS REPORT within 48 hours? │
│ │ │
│ ├─► YES ─► Are you already in a trade? │
│ │ │ │
│ │ ├─► YES ─► CLOSE THE TRADE │
│ │ │ (Don't risk earnings gap) │
│ │ │ │
│ │ └─► NO ──► DO NOT ENTER │
│ │ (Wait until after earnings) │
│ │ │
│ └─► NO ──► PROCEED (news is not blocking) │
│ │
└─► FOREX / COMMODITIES / INDICES ───────────────────────────┘
│
▼
What TIMEFRAME are you trading?
│
├─► 15 MINUTE ──────────────────────────────────────────────┐
│ │
│ Is there a 2-star OR 3-star event within 3 HOURS? │
│ (Include USD 3-star even if not trading USD pairs) │
│ │ │
│ ├─► YES ─► Are you already in a trade? │
│ │ │ │
│ │ ├─► YES ─► Is price close to SL? │
│ │ │ │ │
│ │ │ ├─► YES ─► CLOSE NOW │
│ │ │ │ (Spread widening │
│ │ │ │ will likely stop │
│ │ │ │ you out anyway) │
│ │ │ │ │
│ │ │ └─► NO ──► CLOSE BEFORE │
│ │ │ EVENT │
│ │ │ │
│ │ └─► NO ──► DO NOT ENTER │
│ │ (Event is within 3h window) │
│ │ │
│ └─► NO ──► PROCEED (news is not blocking) │
│ │
└─► 1 HOUR or 4 HOUR (H1/H4) ────────────────────────────────┘
│
▼
Is there a 3-STAR event within 8 HOURS?
(Include USD 3-star even if not trading USD pairs)
(EUR 3-star also affects GBP and CHF)
│
├─► YES ─► Are you already in a trade?
│ │
│ ├─► YES ─► Is price close to SL?
│ │ │
│ │ ├─► YES ─► CLOSE NOW
│ │ │ (Spread widening risk)
│ │ │
│ │ └─► NO ──► How close is the event?
│ │ │
│ │ ├─► IMMINENT (<1h) ─► CLOSE NOW
│ │ │
│ │ └─► NOT IMMINENT ──► Monitor;
│ │ close before
│ │ event if still
│ │ in trade
│ │
│ └─► NO ──► DO NOT ENTER
│ (Event is within 8h window)
│
├─► NO, but there's a 2-STAR event ─────────────────────────┐
│ │
│ Is it a "HOT TOPIC" 2-star? (e.g., inflation-related │
│ during high-inflation periods) │
│ │ │
│ ├─► YES ─► Treat as 3-star (see above) │
│ │ │
│ └─► NO ──► PROCEED │
│ (H1+ timeframes absorb 2-star noise) │
│ │
└─► NO relevant news ─► PROCEED (news is not blocking) │
│
└──────────────────────────────────────────────────────────────────┘
ACTIONS SUMMARY:
┌────────────────┬────────────────────────────────────────────────────────────┐
│ Action │ When to use │
├────────────────┼────────────────────────────────────────────────────────────┤
│ PROCEED │ No blocking news; safe to enter or hold trade │
├────────────────┼────────────────────────────────────────────────────────────┤
│ DO NOT ENTER │ Blocking news ahead; wait for window to clear │
├────────────────┼────────────────────────────────────────────────────────────┤
│ CLOSE NOW │ In trade + event imminent OR price near SL │
│ │ (spreads widen, slippage common - don't rely on SL) │
├────────────────┼────────────────────────────────────────────────────────────┤
│ CLOSE BEFORE │ In trade + event coming but not imminent │
│ EVENT │ (exit in profit or loss before the release) │
└────────────────┴────────────────────────────────────────────────────────────┘
QUICK REFERENCE TABLE:
┌─────────────┬───────────┬────────────┬─────────────────────────────────────┐
│ Instrument │ Timeframe │ News Level │ Blackout Window │
├─────────────┼───────────┼────────────┼─────────────────────────────────────┤
│ Forex/Comms │ M15 │ 2 or 3★ │ 3 hours │
│ Forex/Comms │ H1+ │ 3★ only │ 8 hours │
│ Forex/Comms │ H1+ │ 2★ │ Ignore (unless hot topic) │
│ Stocks │ H1/H4 │ Earnings │ 48 hours │
│ ANY │ ANY │ USD 3★ │ Use above windows (affects ALL) │
└─────────────┴───────────┴────────────┴─────────────────────────────────────┘