Market conditions and costs
High-impact news
Scheduled releases move price fast and can jump a stop.
Widely taught. The Exchange can test it on public price history and will say what it finds.
The mechanism is well known to practitioners. No quantified retail-level study of the size of the effect was found.
What it is
Interest rate decisions, jobs and inflation reports and central bank speeches are scheduled. Around them spreads widen, liquidity thins and price can move several ranges in seconds. A stop can be filled at a worse price than set, which is slippage, or price can gap past it.
What it suggests
A plan can decide beforehand whether to trade around a release, and how far before and after to stand aside.
How to check it
Check the calendar before a trade and write the window in the plan, such as waiting 15 to 30 minutes after a release.
Common mistakes
- Holding a full-size position through a release without having decided to.
How we will test it
On public price history, never on anyone's account. Until it is done, the note above is all we can honestly say.
- Cases: high-impact releases from the public calendar
- Measure: typical range in the 30 minutes after versus the average 30 minutes, per market
- Window: 30 minutes
- Compared with: non-event periods at the same hour
Related lessons
Written in our own words. Education only, not financial advice.