High-Impact News
Also called Red-folder news, Tier-1 news, Market-moving news, Major news events
High-impact news is a scheduled economic release or central bank event, such as a rate decision, jobs report or inflation figure, that usually moves a currency sharply within minutes.
In the minutes around these releases, price can jump past your stop and the spread (the gap between the buy and sell price, which is your cost to trade) can widen, so a trade can lose more than you planned. If you know when they land, you can decide in advance whether to stand aside, protect an open trade or trade the move on purpose.
What makes an economic release high-impact
High-impact events usually include central bank interest rate decisions and press conferences, the US jobs report (Non-Farm Payrolls), inflation (CPI) and GDP. Speeches by central bank heads can also qualify.
The number alone does not move the price. The surprise does: the gap between the actual figure and the forecast (also called the consensus). A strong figure that matches the forecast may barely move the market. A weak figure that is less bad than expected can still push the currency up.
A common misread is to look only at the headline figure. Also check the revision to last month's figure and the other lines in the same release, such as wage growth inside a jobs report. If the first spike reverses within minutes, one of these is often the reason.
Reading the impact rating on an economic calendar
Most trading platforms and broker websites include an economic calendar. Each row shows the time, the currency, an impact level (usually three levels, colour-coded, with high often in red, based on how much that event has moved prices in the past), the forecast, the previous figure and the actual figure once it is released.
The calendar's time zone may not match your chart, which often runs on the broker's server time. Being off by an hour is a common way to get caught in a release you thought had passed.
If you run an automated system, look for its news filter setting. This pauses new trades for a set number of minutes before and after listed events. If the system trades the 1-minute or 5-minute chart, set the window wider than the period when spreads stay wide, not just wide enough to cover the spike.
How a news spike can turn a 20-pip stop into a bigger loss
Once price touches your stop loss, the stop becomes a market order. In a fast move there may be no buyers or sellers at your stop price, so you get the next available price. This is called slippage: a fill at a worse price than you asked for.
Ordinary slippage is a small miss, because prices are still trading near your stop. A news gap is different. Price jumps from one level to the next with no trades in between, so your stop can fill far beyond the price you set.
Here is an illustrative example. You are long EUR/USD with 1 standard lot (100,000 units) and a stop 20 pips below your entry, on a $10,000 account. US inflation comes out hot. Price drops straight through your stop, and the first available price is 35 pips below your entry. The chart below shows the gap: the news candle opens below the stop line, and the stop fills at that open.
The calculation below shows what that costs.
If you choose to hold through a release, size the trade for the worst fill you would accept, not for your stop price. In this example, keeping risk at $200 with a possible 35-pip fill gives $200 ÷ (35 × $10) = 0.57 lots instead of 1.
Planning the minutes around the release
The timeline below shows an illustrative hour with the release in the middle. Spreads widen before the number as liquidity (how many buyers and sellers are quoting prices) thins. The first spike comes in seconds. Price often whipsaws both ways while the market digests the details.
If you want to trade news, a calmer approach is to skip the spike. Let the whipsaw settle and mark the high and low of the range it leaves behind. Enter only on a candle close beyond that range, in the direction of your higher-timeframe bias. Put your stop on the other side of the range, and exit at a set multiple of that risk or at your usual target.
| Your situation before the release | A sensible action |
|---|---|
| Open trade, stop tight, small profit | Close it or take partial profit, because a tight stop sits inside the likely spike, so it is the one most likely to be hit and filled at a gap price |
| Open swing trade, stop far away | Hold, but check the size against a slipped fill |
| No position, no news plan | Stand aside until spreads return to normal |
| No position, tested news plan | Wait for the post-spike range, then follow your rules |
Checks before a high-impact release
- Scan the week's calendar for high-impact events on both currencies in every pair you trade.
- Convert each release time to your chart's time.
- Don't count on a breakeven stop. Size for a gap past it.
- Look at the live spread in the order window before you click buy or sell.
- Cancel pending orders you no longer want. A news spike can fill them.
- On a funded or prop-firm account, read the news rules first. Some restrict trading around releases.
FAQ
Can news about one currency move a pair that does not contain it?
Yes. A big US release can move gold and cross pairs such as EUR/JPY. A cross is priced from the two dollar pairs underneath it (here EUR/USD and USD/JPY), so if those react by different amounts, the cross moves too. The release can also shift risk sentiment, which moves safe-haven assets such as the yen and gold.
Should I place buy-stop and sell-stop orders on both sides before the number?
This setup is risky. Both orders can fill with slippage during a whipsaw, leaving you with two losing trades instead of one winner.
Do unscheduled events count as high-impact news?
Not on a calendar. Calendars list only scheduled events, so a surprise statement or a sudden headline never shows up with a time or an impact rating. The risk works like a weekend gap: price can start trading far from where it was, past any stop you left in place.