How Foreign Exchange Trading News Can Mess Up Your Trades

Foreign exchange trading stories gives some traders the information that they need to make a large amount of cash with daytrading or scalping techiques but for others it just seems to cause a giant wreck. check your broker’s T&Cs if you’d like to trade around news reports. Some will instantly close your currency trades at times of high volatility. Others will not permit you to open a new trade.

Many brokers will increase the spread at these times and you may not be told by how much. The higher spread can be anywhere up to 5 times the normal spread for that currency pair.

Slippage occurs when you do not get the price that you saw on your screen. It is commoner with some brokers than others because it relies on their enterprize model and whether they need to cover the danger represented by your trade. With some market makers you can experience significant slippage even in relatively stable times.

The same is applicable to stop and limit orders : you’re much less certain to get the price you were expecting at these times.