Guide · Updated 4 November 2026

News Trading in Forex: Spreads, Slippage and Latency at Releases

By Sergey Berezhnov, Founder, CEO and Lead Developer of Westernpips · Published 4 November 2026 · Updated 4 November 2026 · About 8 minutes to read

News trading means trading in the seconds around a scheduled economic release, such as payrolls, inflation or a central-bank decision, when prices can jump within milliseconds. The price move is real, but so are the costs: spreads widen, liquidity thins, orders slip and some are rejected. For most automated traders the most valuable news tool is not a news strategy but a schedule that pauses other strategies around releases.

Key takeaways

Releases move FX in jumps: research finds that announcement surprises cause near-instant jumps in exchange rates, and bad news moves them more than good news.
Costs spike at the same moment: wider spreads, slippage and rejections can take most of the move.
Three approaches: trade the surprise, trade the stale broker quote during the jump, or step aside and protect other strategies.
Check broker rules: some brokers restrict trading around news or change margin and execution during releases.

What News Trading Is

News trading is trading around scheduled macroeconomic releases and central-bank decisions, when new information reaches the market at a known time and prices adjust within seconds. Traders either try to profit from the adjustment or avoid being caught by it.

In foreign exchange the effect is well documented. Andersen, Bollerslev, Diebold and Vega (2003) found that announcement surprises produce jumps in the conditional mean of exchange rates, so high-frequency FX moves are linked to fundamentals, and that the market reacts asymmetrically: bad news has a greater impact than good news.

What Happens to Forex Prices at a News Release

In the moments around a release, liquidity providers pull or widen their quotes, spreads widen, the price jumps to a new level and then often swings while the market digests the number. Broker quotes can lag the fastest feeds more than usual, and orders are more likely to slip or be rejected.

Before: spreads start to widen and order books thin as providers reduce risk.
At the release: the price can jump several pips in a fraction of a second; pending orders fill at the next available price.
After: volatility stays high for seconds to minutes, and the first move sometimes reverses.

Three Approaches to News Trading

There are three main approaches: trading the surprise, which needs the number faster than the market and a model of its impact; trading broker quotes that lag the jump, which is latency arbitrage during news; and stepping aside, which pauses other strategies to avoid wide spreads and slippage.

	Trade the surprise	Trade the stale quote	Step aside
Idea	Compare the number with the forecast and trade the direction	Trade a broker quote that has not yet caught up with the jump	Pause trading in a window around the release
Needs	A very fast data source and an impact model	A fast price feed and fast execution	A release calendar and a schedule
Main risk	Slower than professional news desks; whipsaw	Slippage, rejections, broker rules on news	Missed opportunities
Suits	Professional desks with data feeds	Arbitrage traders who have tested the broker in news	Most automated traders

News Trading Example: Where the Move Goes

In this hypothetical straddle on EUR/USD, the price runs 30 pips past the buy stop, but slippage, the widened spread and commission take about 12 of them, leaving about 18 pips. If the price whipsaws through both pending orders, the same setup loses.

Setup. Before the release EUR/USD trades at 1.08000. A buy stop sits at 1.08100 and a sell stop at 1.07900. The number surprises and the price jumps to 1.08400 within a fraction of a second.

	Pips
Price move from the stop level (1.08100 → 1.08400)	+30
Slippage on the buy stop (filled at 1.08180)	−8
Widened spread on exit (bid 1.08370)	−3
Commission (US$7 per lot)	−0.7
Net (1.08370 − 1.08180, less commission)	+18.3

Of the 30-pip move beyond the stop, about 12 pips went to slippage, spread and commission. If the price first spikes down through 1.07900, filling the sell stop, and then reverses up through 1.08100, both orders fill at poor prices and the trade loses on both sides.

Risks of News Trading and Broker Rules

The main risks are slippage, widened spreads, rejected or delayed orders, gaps through stop losses and fast reversals. Some brokers also restrict trading around news, raise margin requirements during releases or apply last look more strictly.

Slippage and gaps: stops can fill far from their level when the price jumps.
Spreads: a spread several times wider than normal can erase a small edge.
Rejections: last look and price checks reject more orders when prices move fast (see the GFXC guidance).
Broker terms: some agreements restrict trading in a window around releases; check yours. More in how brokers restrict arbitrage.

Pausing or Running Strategies Around News

A news schedule turns strategies on or off in set windows around releases. For arbitrage and other automated strategies, pausing during the most volatile seconds often saves more than it costs, while a strategy tested specifically on news can be allowed to run only in those windows.

Westernpips Private 7 includes a News Scheduler, available to all users, that sets time windows for trading or pausing around news releases for each strategy. Test news windows on recorded ticks in the Back Tester with realistic slippage before trading them. See Westernpips Private 7 and the latency arbitrage guide.

Glossary

News trading: Trading around scheduled economic releases and central-bank decisions.
Announcement surprise: The difference between a released number and the market forecast.
Straddle (pending orders): A buy stop above and a sell stop below the price, placed before a release to catch a move in either direction.
Slippage: The difference between the requested price and the fill price.
Whipsaw: A sharp move in one direction followed quickly by a reversal.

News Trading FAQ

What is news trading in forex?

Trading in the seconds and minutes around scheduled releases such as payrolls, inflation and central-bank decisions, when exchange rates can jump within a fraction of a second.

Is news trading profitable?

It can be, but slippage, widened spreads and rejected orders often take a large part of the move. In our hypothetical straddle about 12 of 30 pips went to costs, and a whipsaw would have produced a loss.

Do brokers allow news trading?

Many do, but some restrict trading in a window around releases, raise margin or apply stricter execution checks. Read the client agreement and ask the broker in writing.

Should I pause arbitrage during news?

Often yes. Spreads, rejections and slippage are highest in the first seconds after a release. A news schedule can pause strategies in those windows or run only strategies tested on news.

Does Westernpips Private 7 trade news?

Private 7 includes a News Scheduler, available to all users, that sets time windows for trading or pausing around releases for each strategy. It does not supply economic data or forecasts.

Disclosure and risk

This page is published by Westernpips, which develops and sells latency arbitrage software, including Westernpips Private 7. Leveraged trading can result in the loss of your capital, and brokers can restrict accounts under their client agreements. Worked examples use hypothetical prices. This is general information, not investment advice.

Sources

Andersen, T. G., Bollerslev, T., Diebold, F. X. and Vega, C. (2003). Micro Effects of Macro Announcements: Real-Time Price Discovery in Foreign Exchange. American Economic Review, 93(1), 38–62. econpapers.repec.org/RePEc:aea:aecrev:v:93:y:2003:i:1:p:38-62
Global Foreign Exchange Committee (2021). Guidance paper on last look, published alongside the FX Global Code (Principle 17). www.globalfxc.org/docs/gfxc_report_last_look.pdf
Westernpips (2026). Latency Arbitrage: How It Works and How to Test It. Guide with costed examples and a broker test. westernpips.com/latency-arbitrage.html
Westernpips (2026). Westernpips Private 7: HFT Trading Software for Latency Arbitrage. Product page. westernpips.com/wp7.html
Financial Conduct Authority (2019). FCA confirms permanent restrictions on the sale of CFDs and CFD-like options to retail consumers (rules apply from 1 August 2019): leverage limits of 30:1 to 2:1, 50% margin close-out, negative balance protection and a standardised risk warning. www.fca.org.uk/news/press-releases/fca-confirms-permanent-restrictions-sale-cfds-and-cfd-options-retail-consumers
European Securities and Markets Authority (2018). ESMA adopts final product intervention measures on CFDs and binary options: leverage limits from 30:1 (major currency pairs) to 2:1, 50% margin close-out, negative balance protection and a standardised risk warning; CFD measures applied from 1 August 2018. www.esma.europa.eu/press-news/esma-news/esma-adopts-final-product-intervention-measures-cfds-and-binary-options

About the author: Sergey Berezhnov, Founder, CEO and Lead Developer of Westernpips

Trader and developer of software for latency arbitrage and HFT trading with more than 19 years of experience. He founded Westernpips in 2007 and leads the development of Westernpips Private 7, its FIX and API connectors and the tools used to record and analyse quotes and fills.

Risk warning: leveraged forex and CFD trading can result in the loss of your capital, and retail providers must disclose the share of their accounts that lose money (FCA, ESMA). Latency arbitrage depends on execution you cannot guarantee: orders can be late, rejected or restricted by the broker. Worked examples use hypothetical prices; the gold figures are displayed quotes from three single sessions, not executed trades; research figures are quoted from the named studies. Westernpips publishes this page and sells the software described on it. This is not investment or legal advice, and past or simulated results do not guarantee future results.