Trading during big news events like NFP, CPI, Interest Rate Decisions, or FOMC can be very risky. Many traders try to make fast money during these periods, but most of them end up losing instead.
This article breaks down the main reasons and shows you easy steps to stay safe during news trading.
1. The Market Moves Too Fast
During news time, the market can jump up and down in seconds.
Your buy or sell order may not enter at the price you want, and your stop-loss may not work perfectly.
This fast movement causes many traders to lose money quickly.
2. Traders Guess Instead of Waiting
Many traders think they know where the price will go after the news.
They guess the direction and enter early.
But the market does not move the same way every time.
When the news comes out, price may go the opposite way, and they lose.
3. Over-Leverage (Using Big Lot Size)
News brings big movement, so traders feel they can double their money quickly.
They use large lot sizes, thinking they will catch the move.
If the market goes against them even a little, their account may blow immediately.
4. No Risk Plan
Most losing traders do not have a plan for news.
They do not know:
- how much they want to risk
- where they will exit
- what to do if the price reverses
Trading without a plan during news is like driving a car with no brakes.
5. Emotional Trading
News movement creates fear and excitement.
Many traders panic when price jumps.
Some close too early, some hold too long, and some revenge trade.
Emotions make traders lose more than the news itself.
How to Avoid Losing Money During News Events
1. Reduce Lot Size
If you want to trade news, use a small lot size.
Small lots protect your account from fast moves.
2. Wait for the First Move to Finish
Let the news drop first.
Wait for the market to calm down and choose a direction.
Then follow the trend.
Trading after the spike is safer.
3. Always Use Stop-Loss
Never trade news without stop-loss.
It protects you from sudden movements.
4. Avoid Guessing
Do not enter before the news just because you think you know the direction.
The market reacts differently each time.
5. If You Are Not Sure — Don’t Trade
One of the best strategies during news is not trading at all.
Sometimes staying out of the market is the smartest decision.
Final Message
News events are powerful.
They can make you money, but they can also destroy your account fast.
Trade with a plan, manage your risk, and avoid emotional decisions.
If you learn to handle news properly, you will become a better and safer trader.
