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It is 2:30 PM German time. The Non-Farm Payrolls are released. Within seconds, the NQ shoots up 150 points, drops 200 points, and then stabilizes somewhere in the middle. Your stop was triggered before you even understood what happened. Welcome to news trading.
Macroeconomic events move the futures markets like nothing else. In this article, I explain which events really matter, how to use the economic calendar, and whether you should trade before, during, or after the news. Spoiler: For most traders, the answer is clearer than they think.
Why news moves the markets
Financial markets are expectation machines. The current price already reflects everything market participants expect. If an event delivers exactly what was expected, little often happens. The surprise is already priced in.
What really moves the market is the deviation from expectations. If the market expects 200,000 new jobs and 350,000 are reported, that is a surprise. The market has to process the new information and reposition. That is what creates the sharp price moves.
Three factors play a role:
- Consensus vs. reality: How large is the deviation from the expected value?
- Context: What market environment is the event taking place in? In a nervous market, the same numbers have a different effect than in a calm one.
- Interpretation: Sometimes “good” numbers are bad for the market (e.g., strong job data = the Fed cuts rates more slowly = bearish for equities). The interpretation is often more important than the number itself.
The most important events for futures traders
Not every event is equally relevant. Here are the heavyweights, sorted by impact:
| Event | Abbreviation | Frequency | Impact | What it measures |
|---|---|---|---|---|
| FOMC rate decision | FOMC | 8x per year | Very high | US central bank policy-rate decision |
| Non-Farm Payrolls | NFP | Monthly (1st Friday) | Very high | New jobs created outside agriculture |
| Consumer Price Index | CPI | Monthly | High | Inflation (consumer prices) |
| Producer Price Index | PPI | Monthly | Medium-high | Inflation (producer prices) |
| GDP (gross domestic product) | GDP | Quarterly | Medium-high | Economic growth |
| ISM Manufacturing/Services | ISM PMI | Monthly | Medium | Purchasing Managers’ Index (economic activity) |
| Jobless Claims | Claims | Weekly (Thu) | Low-medium | Initial unemployment claims |
| Fed Minutes | Minutes | 3 weeks after FOMC | Medium | Minutes of the last FOMC meeting |
| Retail Sales | Retail | Monthly | Medium | Retail sales (consumer spending) |
In addition, there are irregular events such as Fed speeches (especially by the Chair), geopolitical events, and earnings season (mainly affecting the NQ when tech giants report).
Using the economic calendar
An economic calendar is your most important tool for dealing with news. It shows you which events are released on which day and at what time.
The best free economic calendars:
- ForexFactory: The classic. Filters by impact (red = high, orange = medium, yellow = low).
- Investing.com: Comprehensive, with historical data and consensus estimates.
- TradingEconomics: Very detailed, with charts of historical values.
- CME FedWatch Tool: Specifically for FOMC meetings. Shows market expectations for rate changes.
How to use the calendar correctly:
- Check the calendar every evening for the next trading day.
- Mark all events with high impact (red) and note the time.
- Check the consensus (expected value) and the previous value.
- Plan your trading around these events.
Most major US data is released at 2:30 PM CET (8:30 AM Eastern). FOMC decisions come at 8:00 PM CET (2:00 PM Eastern), with the press conference 30 minutes later.
Trade before, during, or after the news?
This is the key question. And the honest answer is: It depends on who you are.
Before the news (30–60 minutes beforehand):
- Markets often become quiet. Many traders step back and wait.
- Liquidity declines, and spreads can widen.
- Recommendation: Close existing trades or adjust stops. Do not open a new trade unless it has nothing to do with the event.
During the news (the first 5–15 minutes):
- Extreme volatility. Wild swings in both directions.
- Slippage is real. Your stop at 18,500 may be filled at 18,480.
- Spreads briefly explode.
- Recommendation for most traders: Stay out. The first minutes after a news release are a battlefield. Without specific experience and infrastructure, you have no edge there.
After the news (15–60 minutes afterwards):
- The initial reaction has been absorbed. The direction becomes clearer.
- Liquidity normalizes.
- A new range often forms, or a trend establishes itself.
- Recommendation: This is where the best opportunities are. Wait for the dust to settle, then trade the structure that has formed.
Volatility around events: What really happens
Volatility around news events follows a typical pattern:
1. Compression (before the event): The market tightens its range. ATR declines. Traders wait. The calm before the storm.
2. Expansion (at release): Sudden breakout—often in both directions (“whipsaw”). The market tries to classify the new information.
3. Reversal or continuation (5–30 minutes afterwards): The initial reaction is either confirmed (the market continues in the same direction) or rejected (a full reversal). The reversal variant is particularly tricky because many traders jumped on the first move.
4. Establishment (30–60 minutes afterwards): The market finds its new equilibrium. Only then can you assess direction meaningfully.
This pattern is especially pronounced with FOMC and NFP. For less important events (e.g., weekly Jobless Claims), the effect is more muted.
News reactions in NQ and ES
The NQ (Nasdaq) and the ES (S&P 500) react differently to news.
NQ (Nasdaq 100):
- Reacts more strongly to tech earnings and rate decisions
- Higher volatility around FOMC (tech is rate-sensitive)
- Moves of 200–400 points on FOMC are normal
- Particularly sensitive to Fed guidance on future rate policy
ES (S&P 500):
- More broadly diversified, therefore somewhat less volatile around individual events
- Reacts strongly to labor market data (NFP) and inflation data (CPI)
- Typical FOMC moves: 50–150 points
- Considered the “safer” market for news days
If you want to trade on FOMC days, the ES is generally better suited than the NQ because the moves are proportionally smaller and slippage tends to be lower.
Strategies: Avoid or use them?
There are two basic approaches to dealing with news. Both are valid.
Approach 1: Avoid news entirely
- You only trade on days without high-impact events
- Or you close all positions 30 minutes before the release
- Advantage: No stress, no slippage risk, no emotional overreactions
- Disadvantage: You miss some of the best trading days of the month
- Recommended for: Beginners and traders who do not tolerate volatility well
Approach 2: Post-news trading
- You wait out the initial reaction (15–30 minutes)
- Then you trade the structure that has formed (breakout, trend, reversal)
- Advantage: Clear direction, strong momentum, good moves
- Disadvantage: Requires experience and fast decisions
- Recommended for: Experienced traders with a solid rule set
What I do not recommend: Trading straight into the news. Straddle strategies (long and short at the same time, hoping one side wins) sound clever, but rarely work in practice because slippage eats both sides.
Integrating the event calendar into your workflow
Here is a practical workflow you can implement immediately:
On Sunday evening:
- Open the economic calendar for the coming week
- Mark all high-impact events with date and time
- Note the consensus estimates for the most important events
- Decide: Which days will you trade normally? Which days will you wait?
Every morning before trading:
- Check whether any events are scheduled today
- If so: Plan your trading around the release time
- Set yourself a rule: “No new trades 30 minutes before event X”
After the event:
- Wait at least 15 minutes
- Observe the price reaction and volume
- If a clear structure forms, trade as usual
Tips for beginners
If you are still at the beginning of your trading career, here are my specific recommendations for dealing with news:
- Memorize the most important events. FOMC, NFP, CPI. You should know these three by heart.
- Do not trade on FOMC days at first. Watch the market, but do not take a trade. First learn how the market reacts before you get involved.
- Use an economic calendar with alerts. Set reminders 30 minutes before every high-impact event.
- Journal how the market reacted. After a few months, you will recognize patterns. FOMC days often have a typical structure. NFP Fridays as well.
- Reduce your position size on news days. If you do want to trade, use half your normal size. The volatility compensates for the smaller position.
- Forget “news trading” as a standalone strategy. For retail traders, news trading is extremely difficult. You are better off learning to trade around news rather than straight into it.
In the Zenith System, news events are used as a filter, not as a trigger. This means: On certain days, no trading takes place. That alone protects you from many unnecessary losses.
Conclusion: Understand news, do not fear it
News events are a fixed part of the futures markets. You cannot ignore them, but you do not have to fear them either. The key is to plan how you will handle them instead of being caught off guard.
Over the course of 12–18 months, you will develop a feel for how the market reacts to different events. You will learn when to trade and when to wait. That comes with experience and observation.
If you are looking for a structured approach that shows you how to integrate macroeconomic events into your trading rule set, take a look at the TPTE Academy. And if you are unsure how to handle news, book a free initial consultation. Together, we will find the right approach for you.
