Time of Day and News Trading Models
Why News Moves Markets
Markets move on news because it changes perceived value. Rates, growth expectations, inflation, and risk all feed into positioning decisions – especially for larger players operating on higher timeframes.
But not all news matters equally.
The real questions are:
How many people are watching this release?
How wrong could expectations be?
The more eyes on an event, the more positioning builds ahead of it. And when positioning is one-sided, even a small surprise can create opportunity. Subtle data rarely moves price unless it challenges a widely held belief.
The Three Phases Around a News Event
News-driven price action tends to fall into three distinct phases:
Pre-news
Price often drifts, rotates, or hugs a mean. Exposure is reduced as traders wait for clarity. This environment favours patience and mean reversion, not aggression.
During the release
Liquidity thins, algorithms dominate, and price can spike violently. Many moves are noise rather than information. This is the most dangerous phase for discretionary decision-making.
Post-news
This is where the real story emerges. Traders assess whether the data truly changes the narrative or simply causes a temporary reaction. Trends can form, traps can appear, or the market may quietly return to its prior rhythm.
Understanding which phase you’re in prevents costly mistakes.
How Top Traders Think About News Risk
Larger participants rarely guess ahead of major releases. Being wrong before the data is often worse than being late after it.
They wait for justification, confirmation, and alignment with broader context.
This mindset explains why some of the best opportunities come after the headline – when reactions are clearer and positioning is exposed. It’s also why bracketing and reaction-based approaches only work when surprise risk is low and expectations are tightly clustered.
When chaos is expected, restraint becomes the edge.
Final Thoughts: Context Before Cleverness
Time-of-day and news trading rewards awareness, not prediction.
Before acting, ask:
Where are we in the session?
Who is active right now?
Is this a moment of information or emotion?
What behaviour is most likely next?
When timing, context, and strategy align, trades feel smoother and more decisive.
When they don’t, standing aside isn’t missed opportunity – it’s professional risk management.