news-trading

---
name: news-trading
description: Trade volatility around economic news and corporate events. Use when capitalizing on market-moving news, trading earnings, or positioning for scheduled events.
---

# News Trading Strategy

News trading captures volatility from scheduled economic events and corporate announcements.

## High-Impact Events

### Economic Calendar

| Event           | Impact    | Typical Move |
| --------------- | --------- | ------------ |
| FOMC/Fed Rate   | Very High | 100+ pips    |
| NFP (Jobs)      | Very High | 50-100 pips  |
| CPI (Inflation) | High      | 50-80 pips   |
| GDP             | High      | 30-50 pips   |
| Retail Sales    | Medium    | 20-40 pips   |

### Corporate Events

- Earnings releases
- Guidance updates
- M&A announcements
- Product launches

## Trading Strategies

### 1. Pre-News Positioning

- Analyze expectations vs likely outcome
- Position before announcement
- High risk—binary outcome
- Use smaller size

### 2. Straddle (Options)

- Go long both call and put
- Profit from large move either direction
- Requires options access

### 3. Post-News Reaction

- Wait for initial spike
- Look for reversal or continuation
- Trade the follow-through
- Safer but less profit

### 4. Fade the Move

- Wait for overreaction
- Trade reversal back to mean
- Experienced traders only

## Entry Workflow (Post-News)

1. **Wait for news release**
2. **Observe initial reaction** (1-5 minutes)
3. **Wait for consolidation** (5-15 minutes)
4. **Enter breakout** of post-news consolidation
5. **Wide stop** (volatility is high)
6. **Target** next key level

## Risk Management

| Rule              | Guideline                 |
| ----------------- | ------------------------- |
| Position size     | Reduce by 50-75%          |
| Stop loss         | Wider than normal         |
| No pre-news holds | Close before announcement |
| Spreads           | Widen significantly       |

## News Sources

Use `get_financial_news` tool to:

- Research upcoming events
- Gauge market expectations
- Understand current sentiment
- After event: Analyze reaction

## Avoid These Mistakes

- Trading during first 60 seconds (whipsaws)
- Ignoring widened spreads
- Over-leveraging before news
- Not knowing the scheduled events