Trading around major news releases can be highly profitable — but it’s also where many traders lose money fast. Sudden volatility, fakeouts, and emotional decisions often lead to blown accounts during these periods.
Here’s how to avoid the most common news trading mistakes and approach economic events with a smart, disciplined strategy.
1. Entering Trades Right Before High-Impact News
Many traders gamble by entering positions just before major releases, hoping to catch the “right side” of the move.
Problem: News reactions are unpredictable, often causing wild whipsaws in both directions.
Solution: Stay flat before news or reduce exposure. Let the initial volatility play out before making decisions.
2. Chasing the First Move
Markets often fake out traders by moving sharply in one direction, only to reverse minutes later.
Solution: Wait for confirmation — trade the follow-through, not the initial spike.
3. Using Tight Stop-Losses During Volatile Releases
Small stops get hit easily when spreads widen, and price swings aggressively.
Solution: Widen stops appropriately or avoid trading during peak volatility if your strategy can’t handle it.
4. Ignoring the Economic Calendar
Some traders get caught off-guard by scheduled news they didn’t check.
Solution: Always review daily economic calendars to know when to expect volatility.
5. Overleveraging During News Events
High leverage plus high volatility is a dangerous mix — a recipe for fast losses.
Solution: Reduce position size when trading around news or avoid leverage entirely during key events.
Summary Table: News Trading Mistakes & Solutions
| Mistake | Solution |
|---|---|
| Entering before news | Wait for post-news confirmation |
| Chasing initial spikes | Trade breakouts after stabilization |
| Using tight stops | Adjust for volatility or stay out |
| Ignoring economic calendar | Monitor daily event schedules |
| Overleveraging | Reduce size during high-risk periods |
How LogicINV AI Protects You from News Trading Pitfalls
LogicINV AI enhances your approach by:
- Sending real-time alerts before major news releases
- Tracking volatility spikes and signaling when safer trading conditions return
- Advising on optimal stop placement and position sizing based on live market behavior
Final Tip
News trading isn’t about gambling on headlines — it’s about preparation, patience, and letting volatility work for you, not against you.
Trade news events with confidence. Use LogicINV AI to navigate volatility safely and effectively. Start your free trial today!
➡️ Next Up: AI-Powered Trading Strategies (Module 5.1M)
