At FundingTraders, we recognize the significance of news events and their potential influence on trading decisions. Trades influenced by such news are defined as those that are opened or closed within 10 minutes before or after the release of medium or high-impact news events. This specific time frame is crucial, as market volatility often spikes during these moments, presenting both opportunities and risks for traders.
Risks Associated with Medium or High-Impact News Trades
Trading during medium or high-impact news events can lead to:
Significant Market Gaps: Prices may jump unpredictably, leading to sudden and large movements that can affect trade outcomes.
Wide Spreads: Bid-ask spreads often widen during these events, increasing trading costs.
Undefined Slippage: Stop-loss orders may experience slippage due to rapid price changes, particularly if they are dependent on our liquidity providers.
We recommend closely monitoring the economic calendar. This calendar provides detailed information about scheduled medium or high-impact news releases, helping traders anticipate and plan their trading activities effectively.
While trading around medium or high-impact news events can offer potential opportunities, relying solely on this strategy for your trading success is discouraged. Due to the inherent volatility and potential execution discrepancies, particularly on evaluation and funded accounts, it’s vital to maintain a diversified trading approach. At FundingTraders, we encourage traders to combine various strategies to enhance long-term sustainability and mitigate risks associated with medium or high-impact news trading.
Summary:
Allowed: News trading is allowed.
Definition: Trades influenced by medium(only if it caused a spike in the asset traded) or high-impact news are those open or closed within 10 minutes before or after the release of high-impact news events.
Considerations: Increased volatility may result in significant gaps and wider spreads, which can affect trade execution.
Recommendation: Use the economic calendar to stay informed about news releases.
Caution: Relying heavily on trades influenced by medium(only if it caused a spike in the asset traded) or high-impact news is discouraged, as market conditions can lead to execution discrepancies and unsustainable strategies.
Limitation: More than 50% of profits cannot come from trades influenced by medium(if the pair is directly correlated to the currency) or high-impact news.