What happens in those ten seconds
Liquidity is pulled before the release, so the spread widens — often several times its normal size. Orders fill at whatever price is available rather than the one on the screen, which is slippage, and a stop can fill far beyond where it was placed. None of this is a broker cheating you; it is what a market with no sellers looks like for a few seconds.
Why the first move so often reverses
The first reaction is to the headline number. The second is to the detail underneath it, and the third is to a revision of the previous month or a line in the statement. Each of those can point the other way. A candle that runs fifty pips and gives it all back inside five minutes is the ordinary shape of a release, not an anomaly.
The version that has a stop in it
Be flat through the release. Let it print, let the spread come back to normal, and mark the high and low the move leaves behind. Those are real levels, made by real orders, and a retest of one of them is a trade with an entry, a stop and a reason. You give up the first move and you get a level in exchange.
Or: get out of the way
The other complete answer is to skip the day. Check the calendar during your weekly hour, mark the high-impact releases in your session, and either be flat or do not open. Skipping is a decision, not a failure to find a trade, and it costs nothing but the trades you were never going to size correctly anyway.
If you hold through it, size for it
A position held over a release needs the size worked out from the range the release can produce, not from a quiet afternoon. That usually means a smaller position or no position. A stop does not protect against a gap or against slippage, so the only real protection is the number of lots.
In short
| Spread | Widens sharply, seconds before and after |
|---|---|
| Slippage | Real, and it applies to stops as well |
| First move | Frequently reversed within minutes |
| The trade | The retest of the level the move left |
| The other answer | Skip the day |
| If you hold | Size for the release, not the afternoon |
Common questions
Can I not just set a buy stop and a sell stop either side?
Both fill in a whipsaw, both slip, and you pay a widened spread twice. It is a well-known idea and it is well known because it is expensive.
My stop filled far below where I put it. Is that legal?
Yes, and it is normal in a thin market. A stop is an instruction to trade at the market once a price is touched, not a guarantee of that price.
Which releases are worth marking?
For dollar pairs: inflation, the jobs report and the Fed. For any pair, its own central bank. Your calendar will mark the high-impact ones — the point is to look before the session, not during it.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.