Managing Risk During Key Economic Events

Understanding when to avoid trading can be just as important as knowing when to enter a trade. Economic news releases from the United States have a significant impact on global markets, including the Perpetual Contracts market. These events can create unpredictable volatility, leading to erratic price movements, slippage, and stop-out events. This guide outlines the key events to watch for, how to manage your risk, and when to stay on the sidelines.

Why USA Economic News Can Disrupt Markets

The United States plays a central role in global financial markets. As a result, economic data releases and key government announcements often trigger strong reactions across multiple asset classes, including crypto, forex, and equities. Data that surprises the market (better or worse than expected) can cause sudden spikes in volatility. For day traders, this unpredictability can significantly impact trade execution and risk management.

Key USA Economic Events to Watch For

The following economic events originating from the United States are known for causing heightened market volatility:

• CPI (Consumer Price Index): Measures inflation; unexpected results can drastically shift market sentiment.
• FOMC Meetings & Interest Rate Decisions: Federal Reserve announcements directly influence USD-based pairs and the overall crypto market.
• Non-Farm Payrolls (NFP): A major US employment report that often causes sharp price movements.
• GDP Data: Economic growth data that can impact both short-term and long-term market direction.
• Core PCE Price Index: A key inflation metric closely monitored by the Fed.
• Unemployment Claims: Weekly data that reflects the health of the US labour market.
• Geopolitical Tensions & Emergency Announcements: Unexpected political events can also trigger major market shifts.

Best Practices to Manage Risk During USA News Events

Follow these steps to reduce your exposure to heightened volatility caused by major US news events:

• Check the Economic Calendar Daily: Tools like the economic calendar above provide real-time updates on scheduled US news events.
• Avoid Trading 30–60 Minutes Before and After News Releases: Volatility is typically highest in this window. Even strong setups can get invalidated due to price whipsaws and erratic movements.
• Wait for Price Stability: After a major release, allow 15–30 minutes for the market to stabilise. This waiting period helps reduce the chance of getting caught in false moves.
• Reduce Position Sizes During Volatile Periods: If you must trade during uncertain conditions, lower your position size to manage risk.
• Use Wider Stop Losses: Sudden spikes can temporarily breach key levels before reversing. A wider stop loss can prevent you from being prematurely stopped out.
• Focus on Symbols Less Correlated to USD: When major US data is being released, consider focusing on crypto pairs or altcoins that are less tied to USD volatility.

How to Identify Safe Trading Windows

The safest trading windows are typically:

• After the market has absorbed US news data and resumed a clear trend.
• During active trading sessions (e.g., London and New York overlap) when liquidity is higher and price action is smoother.
• Avoid late Friday trades when weekend volatility can cause unpredictable price gaps.

Key Takeaway

By understanding the impact of major USA economic events and adjusting your trading strategy accordingly, you can avoid unnecessary risks and improve your overall trade execution. Remember, knowing when to stay out of the markets is a crucial skill for long-term trading success.