Intermediate2 min readLast updated: 2026-06-10
News Impact on Price Action — Complete Guide
Understand how economic news impacts Price Action. Learn pre-news positioning, news candle behavior, post-news trading, and news-based strategies.
How News Affects Price Action
Economic news creates sudden volatility spikes that can invalidate technical setups or create new opportunities. Understanding news behavior is essential for Price Action traders.
News Impact Tiers
| Tier | Examples | Typical Impact |
|---|---|---|
| High | NFP, CPI, Rate Decision | 50-200+ pips |
| Medium | Retail Sales, PMI | 20-60 pips |
| Low | Housing, Consumer Confidence | 10-30 pips |
Pre-News Rules
- Close or reduce positions 15-30 min before high-impact
- Widen stops if holding through news
- Don't enter new positions 30 min before
- Mark key levels for post-news trading
- Know the consensus — understand expected vs actual
News Candle Behavior
Common Patterns:
1. Spike + Continuation: Price spikes one direction, continues
→ Trade if aligns with HTF bias
2. Spike + Reversal: Price spikes, then reverses completely
→ Wait for reversal confirmation, then trade
3. Double Spike: Price spikes both directions, then chooses
→ Wait 15-30 min, trade the clear direction
4. No Reaction: Data in-line with expectations
→ Resume normal trading
Post-News Trading (Best Approach)
Don't trade the NEWS — trade the AFTERMATH:
1. Wait 15-30 minutes after release
2. Let initial volatility settle
3. Identify new structure formed by news candle
4. Trade the continuation or retest
5. Use news-created levels as new S/R
This avoids slippage, spread widening, and whipsaws.
News as Catalyst
- News often sweeps liquidity (stop hunts on both sides)
- The REAL direction usually emerges 15-30 min after
- News candles create powerful Order Blocks
- Use news volatility to YOUR advantage by waiting
Related Topics
- Session Analysis — Timing around news
- Liquidity — News sweeps liquidity
- Risk Management — Pre-news risk
- Economic Indicators — Understanding data