A headline hits, price spikes on the initial reaction, and overshoots. Fade the first, panicked print.
“If you can't size for the slippage a fast market produces, sit the first minute out and catch the retrace after it's confirmed.”Jason Parker · Founder
The first five to fifteen seconds after a headline or scheduled economic release are usually an overreaction, not a clean directional move. Spread widens, algorithms react to the raw numbers before anyone's actually read them, and price often spikes further than the news itself justifies. This setup waits for that first spike to exhaust, then fades part of it back.
| Entry | After the initial spike stalls, on the first sign of a retrace forming, not during the spike itself |
| Exit | A partial retrace of the spike, taken in stages, this move can reverse as fast as it started |
| Stop | Wider than usual to account for slippage, with correspondingly smaller size |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
Sometimes the news actually matters and the move keeps going, and fading a genuine trend change because it happened fast is how a small, planned loss becomes a large, unplanned one. If you can't size for the slippage a fast market produces, the honest move is to sit the first minute out and catch the retrace after it's confirmed.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
Entry comes after the initial spike stalls, on the first sign of a retrace forming. The spike itself is never the entry.
The stop is wider than usual to account for slippage, paired with smaller size. The exit is a partial retrace of the spike, taken in stages rather than all at once.
Sometimes the news actually matters and the move keeps going. Fading a genuine trend change because it happened fast turns a small, planned loss into a large, unplanned one.
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