Last Friday’s market action had everything, chaos, headlines, and a whole lot of confusion.
Trump’s 100% tariff threat on China sent traders into panic mode. Stocks and crypto dipped, the dollar spiked, gold went vertical, and within hours, the same moves started fading. It was one of those days where price action didn’t make sense until you zoomed out.
If you’ve been trading long enough, you’ve seen this pattern before. Big news hits, spreads explode, everyone reacts, and then… the market quietly retraces most of it.
Here’s what you need to know.
1. News Moves Are Temporary
News-driven spikes are often short-lived. High-impact releases (CPI, NFP, FOMC) typically trigger sharp moves and wider spreads, but as liquidity normalizes, prices frequently partially retrace within hours and re-anchor to prevailing structure.
Why? Because the first move isn’t always “real.” It’s driven by emotion, algorithms, and thin liquidity. Once the dust settles, institutions rebalance, and the market drifts back to where it started.
So, if you missed the first spike don’t worry. Most of the time, it’s not the real move anyway.
2. Spreads Are Silent Killers
On days like Friday, spreads widen to 5–10 pips on major pairs. That means even if your direction is right, you can still lose money just from poor entry fills.
Spreads represent the cost of entering and exiting a trade. During high-impact events, that cost skyrockets turning “winning” trades into break-evens or losses.
In short: the tighter your timing, the bigger the damage when spreads go wild.
3. The Fade Is the Real Opportunity
The best traders don’t chase spikes they fade them.
Once spreads normalize (usually 1–2 hours after release), price often re-tests those news highs or lows. That’s where patient traders step in. The setups look clean, calm, and logical the opposite of that first candle chaos.
Friday was a perfect example: USD/JPY shot to 151, BTC/USD plunged to 109,800, SPX to 6550, and that’s all after the tariff headline, then after it settled, price re-tested previous candle levels and range.
My Takeaway
News volatility isn’t the market, it’s the noise before the market.
If you can resist the urge to jump in during those first 30 minutes, you’ll see what most traders miss: structure, balance, and opportunity.
The truth is, big moves make headlines, but patience makes profits.