News Straddle StrategyEuro vs. US DollarFX:EURUSDElGore18This setup is designed to capture the initial volatility and directional move following a high-impact economic data release, such as CPI, NFP or a central bank announcement. The strategy is most suitable for liquid assets that are directly correlated with the release. For example, EURUSD, GBPUSD, Gold or US indices may be considered around major US economic data. Ahead of the announcement, price will often consolidate as traders reduce exposure and wait for the new information. The objective is to identify a clearly defined range during the one to two hours leading into the release. A buy-stop order is placed slightly above the range high, while a sell-stop order is placed slightly below the range low. The orders should ideally be entered as close to the release time as possible, with a small buffer added to reduce the risk of being triggered by minor price fluctuations. The two orders should be linked using an OCO order, meaning that once one side is triggered, the opposing order is automatically cancelled. The stop loss can be positioned on the opposite side of the pre-release range, with the target based on a predetermined risk-to-reward ratio, such as 2:1 or 3:1. Key risks include: • Slippage and widening spreads during the announcement • A sharp whipsaw triggering both sides of the range • Entering too early and being caught by pre-release volatility • The market failing to form a clear consolidation • Poor execution when trading less-liquid assets To manage these risks, focus on highly liquid markets, use an appropriate entry buffer and reduce risk per side. Due to the possibility of increased slippage and abnormal volatility, a reduced allocation of approximately 0.5% risk may be more suitable than the usual position size. An options straddle may also provide an alternative way of trading the expected increase in volatility without relying on stop-order execution. This is an event-driven strategy and should only be considered when a clear pre-release range has formed and the selected asset has a strong relationship with the economic release. Example on today US CPI print: