High-impact news: how to manage risk around economic releases

There are moments each month when the market can cover in two minutes what it usually covers in a whole session. Those are high-impact economic releases. In this guide you'll learn what high-impact news is, what happens to spreads and execution during those minutes, which options you have for managing the risk, and how to use an economic calendar so no release ever catches you off guard.

In short: Major economic releases can widen spreads, cause slippage and trigger sharp moves in both directions. You have three sensible paths: stand aside, trade smaller, or widen your stop while keeping the same dollar risk. At Funded Profit, news trading is allowed, but the risk rules apply exactly as they do any other time.

What counts as high-impact news

When traders talk about news, they don't mean newspaper headlines. They mean scheduled economic releases: official data and decisions published at a time known in advance, which the market watches closely.

The categories usually treated as high impact are:

• Interest rate decisions by central banks, plus their press conferences.
• Employment data, such as monthly payroll reports and the unemployment rate.
• Inflation, such as the consumer price index.
• Economic growth, such as gross domestic product.
• Activity surveys and retail sales, depending on the country and the moment.

What moves price isn't so much the number itself as the gap between what was expected and what was released. If the market was already pricing in a figure and that's exactly what comes out, the reaction may be small. If the number is far off, price can reprice in seconds.

This guide isn't about interpreting any particular release or anticipating reactions. It's about something more useful and more durable: how to protect your account when those moments arrive.

What happens in the market around a release

Before: the market thins out

In the minutes leading up to a release, many participants pull their orders to avoid being exposed. Liquidity drops, and price often drifts quietly, as if waiting.

During: wide spreads and jumps

At the moment of the release, several things can happen at once:

• Spreads widen, sometimes to several times their normal size, for seconds or minutes.
• Price jumps from one level to another without trading the prices in between.
• Slippage appears: your market order or stop fills at a worse price than the one you set, because at that instant there was no one on the other side at your price.
• The first move can reverse just as hard, running stops on both sides.

After: the dust settles

After the first few minutes, liquidity returns, spreads normalize and price usually starts building a more readable structure. Many traders prefer to work in this phase.

Why slippage matters so much

Here's an example in numbers. Take a sample $10,000 account and a trade with a planned risk of 1% ($100): a 20-pip stop and 0.5 lots on a pair worth $10 per pip per standard lot.

• If the release causes a jump and your stop fills 12 pips further away, the loss goes from 20 to 32 pips: $160 instead of $100.
• A planned 1% risk turned into an actual 1.6%.

It's an illustrative example, but it makes the key point: during news, your stop is an intention, not a locked-in price. Your position size needs to account for that margin.

Your options for managing the risk

There's no single right approach. What matters is that the decision is in your plan before the release, not something you improvise in the moment.

Option 1: stand aside

It's the simplest choice and, for many traders, the most sensible one. Set a no-trade window, for example 15 minutes before and 15 minutes after each high-impact release that affects your pairs.

• If you have open positions, decide in advance whether you'll close them, protect them or leave them with their original stop.
• If you have pending orders close to price, consider cancelling them: they can trigger with slippage in the middle of a jump.

Option 2: trade smaller

If your strategy needs to trade close to the release, cut your size. A practical rule is to trade half your usual volume, so slippage like in the example above has a limited impact.

Option 3: widen the stop and reduce the lot size

News volatility can hit a tight stop through sheer noise. If you widen your stop, reduce your volume so the dollar risk stays the same.

For example, with the same $10,000 account and $100 of risk:

You can run this calculation in seconds with the lot size calculator. And to review how to place a stop with a clear rationale, see the stop loss guide.

Option 4: let the market show its hand

Instead of trading the instant of the release, wait for the first 15 to 30 minutes to pass. By then there's usually a clear high and low from the initial move, and spreads are back to normal. You can apply your usual method to that new structure.

How to use an economic calendar

An economic calendar lists scheduled releases with their time, country, expected impact level and, in many cases, the previous and forecast figures. Using it well takes five minutes a day:

1. Set the time zone. Use the zone you trade in. If you follow the Funded Profit trading day, UTC-4 is a good reference.
2. Filter by impact and currency. Show only high-impact releases for the currencies you trade. For a pair like EUR/USD, that means the eurozone and the United States.
3. Review the week every Sunday. Note the critical days and times in your plan.
4. Check the day every morning. Confirm the times; events are sometimes moved or added.
5. Keep daylight saving time in mind. Clock changes shift releases relative to your local time. Our guide to forex sessions explains how those changes play out.

Make this part of your pre-market routine and it stops being something you have to remember.

News and the Funded Profit rules

At Funded Profit, trading during news is allowed in both the 1-Phase Challenge and Direct Access. You'll find the details in the news and weekend rule. Being allowed doesn't mean the risk goes away. These rules apply at all times:

• Maximum risk per trade of 2.5%. Slippage can push a loss past what you planned, so leave yourself some room. See the risk per trade rule.
• Loss limits. In the 1-Phase Challenge, the daily loss limit is 4% and the maximum loss is 6% static; in Direct Access, 3% and 5% static. A single sharp move with too much size can eat a large part of your daily room.
• Minimum trade duration of 3 minutes. Strategies that try to get in and out within seconds of the release don't fit this rule.

A practical rule of thumb: on days with major releases, plan your risk as if your stop could fill up to 50% further away. If that would leave you too close to your daily limit, trade smaller or sit it out.

Common mistakes around news

• Not checking the calendar. It's the easiest mistake to avoid and one of the most expensive.
• Leaving pending orders very close to price right before the release.
• Using your usual size with your usual stop in conditions that are anything but usual.
• Chasing the first move. The first spike often partially reverses, and entering late with a wide spread rarely pays.
• Moving the stop "to give it room" without adjusting the volume.
• Trying to guess the number. Your edge lies in managing risk, not in predicting figures.

Trading involves risk, and around news that risk gets concentrated. Having a clear protocol lets you get through those moments calmly, whether you decide to trade or not.

FAQ

Can I trade during news at Funded Profit?

Yes. Trading during economic releases is allowed in every program. The maximum risk per trade, the loss limits and the 3-minute minimum trade duration still apply.

What is slippage?

It's the difference between the price you wanted an order filled at and the price it actually filled at. It's more common during low liquidity and sharp moves, such as a high-impact release.

How long before and after a release should I stop trading?

There's no universal number. A common reference is a 15-minute window before and after, adjusted to your strategy and to what you see in your own trading history.

Should I close my trades before a major release?

That depends on your plan. What matters is deciding in advance: close them, protect them, or keep them at a size you can tolerate if the stop fills with slippage.