The Hidden Costs of Trading High-Impact News Events
Market volatility during high-impact news events like Nonfarm Payrolls (NFP) releases or central bank announcements often leads to widened spreads and slippage, eroding potential gains. Traders face a 'volatility tax' as execution prices diverge from expectations, undermining strategy effectiveness.
Spreads that typically span a few pips can balloon during rapid market movements, increasing trading costs precisely when opportunities arise. Slippage compounds the problem, with even millisecond delays altering entry points. These factors introduce uncertainty, challenging traders to navigate unpredictable conditions.
Predictable trading environments remain elusive during such events. While market movements can't always be forecast, managing execution risks becomes paramount. The interplay between volatility and execution quality highlights the need for robust strategies that account for hidden costs.
