Waiting five minutes: the unfashionable news strategy

[Fairman]

Waiting five minutes: the unfashionable news strategy

There is nothing exciting about waiting. A trader sits through the release, watches the chaos, and does nothing for five minutes. Then the market begins to settle, spreads narrow, and a clearer picture emerges.

Many experienced scalpers adopt exactly this approach. The initial move belongs to machines and to anyone with an edge in speed. What follows is often more orderly, and a trader who has watched the reaction can see which side is winning.

The cost is missing the first part of the move. The benefit is better fills, tighter spreads, and a lower chance of being whipsawed by the reversal that often follows.

Testing is straightforward. Take the past few months of major releases, mark the price at the release, five minutes later, and fifteen minutes later, and imagine entering in the direction that price had moved by minute five. The results often look surprisingly decent.

It is not a magic system, but it turns news from a gamble into something closer to a normal trade, taken in a better environment.

A good variant is waiting for the first pullback after the initial move, then entering in the direction of the move with a stop beyond the pullback low. It avoids the worst of the chaos and keeps the structure of a normal trade.

What delay after a release has worked best before taking a trade?