News / Event-based
News EAs trade the volatility spike surrounding scheduled economic releases using a straddle before the event, or a blackout filter to avoid erratic post-release price action. High variance; spread-sensitive.
Mechanism
Pre-news straddle: two pending orders (one buy stop, one sell stop) are placed a fixed number of pips above and below spot before a high-impact release. The first triggered order cancels the other after fill. News blackout: the EA monitors the economic calendar and suppresses new entries for a configurable window (e.g. 2 hours before and after). The blackout variant is purely defensive — it improves another strategy's performance by avoiding news disruption.
Suitability
Straddle variants require extremely tight spreads and fast execution to clear the cost-of-entry before post-release spread normalises. Best on USD/JPY, EUR/USD, GBP/USD on NFP, FOMC, CPI releases. Blackout variants are universally beneficial and impose minimal cost. Raw/ECN account mandatory for straddle approaches; Market or Standard accounts produce negative expectancy after spread.
Notes
News strategies trade the one moment the market is guaranteed to move: a scheduled high-impact release. There are two opposite approaches. A pre-news straddle places buy- and sell-stop orders above and below price, aiming to catch whichever way the spike runs; a news blackout does the reverse, suppressing entries around releases so that another strategy is not whipsawed by erratic post-release prices.
The two have very different economics. The straddle is variance-heavy and brutally spread-sensitive — if the spread widens past the entry buffer before the order clears, the edge is gone, so it demands a Raw/ECN account and fast execution. The blackout variant, by contrast, is almost free insurance: it costs a handful of skipped trades and reliably improves a trend or scalping EA’s results.
When evaluating a news EA on this catalogue:
- Account type — straddle approaches are negative-expectancy on Standard/Market spreads; Raw/ECN is mandatory.
- Execution speed — measured slippage around NFP, FOMC and CPI is the make-or-break variable.
- Straddle vs blackout — know which you are buying; they have opposite risk shapes.
- Calendar accuracy — the EA is only as good as the economic calendar feed it reads.
Glossary