Anatomy of a news candle, tick by tick
Posted: Fri Oct 30, 2026 8:07 am
Anatomy of a news candle, tick by tick
A five-minute candle around a major release looks like one tall bar. Zoom in to tick level and it falls apart into distinct phases, each with its own rules.
Phase one is the quiet before. Starting maybe 30 to 60 seconds ahead of the release, quoting thins. Spread widens gradually and tick rate falls. Some liquidity providers pull out entirely. The chart looks calm, which fools people into thinking nothing is about to happen.
Phase two is the print. In the first second after the number, a handful of ticks arrive with huge gaps between them. Price might jump 15 pips across three ticks. A market order sent in this phase fills at a price that no longer exists by the time the confirmation comes back. The log will show a fill far from the click.
Phase three is the overshoot. Algorithms have read the headline and positioned. Human traders start reacting. The price often overshoots in the first direction and then retraces part of the move. The spread is still wide.
Phase four is the digestion. Over the next few minutes, the true view of the number emerges as the market compares it with forecasts, revisions, and details inside the report. The initial move frequently reverses or extends based on this reading.
Scalpers who think "news trading" means clicking in phase two are paying the maximum cost for the minimum information. Those who wait for phase four give up the first spike but get tighter spreads and more reliable direction.
There is also a hybrid approach that places limit orders before the release in positions expected to be caught in the overshoot, but that works only for those who have tested the specific fill behaviour of their broker.
Whichever approach is chosen, tick data from past releases is the only reliable guide. A day spent reviewing a dozen releases at tick level teaches more than a month of live attempts.
Which phase of a news candle tends to cost the most on the account being traded, once the fills are laid out?
A five-minute candle around a major release looks like one tall bar. Zoom in to tick level and it falls apart into distinct phases, each with its own rules.
Phase one is the quiet before. Starting maybe 30 to 60 seconds ahead of the release, quoting thins. Spread widens gradually and tick rate falls. Some liquidity providers pull out entirely. The chart looks calm, which fools people into thinking nothing is about to happen.
Phase two is the print. In the first second after the number, a handful of ticks arrive with huge gaps between them. Price might jump 15 pips across three ticks. A market order sent in this phase fills at a price that no longer exists by the time the confirmation comes back. The log will show a fill far from the click.
Phase three is the overshoot. Algorithms have read the headline and positioned. Human traders start reacting. The price often overshoots in the first direction and then retraces part of the move. The spread is still wide.
Phase four is the digestion. Over the next few minutes, the true view of the number emerges as the market compares it with forecasts, revisions, and details inside the report. The initial move frequently reverses or extends based on this reading.
Scalpers who think "news trading" means clicking in phase two are paying the maximum cost for the minimum information. Those who wait for phase four give up the first spike but get tighter spreads and more reliable direction.
There is also a hybrid approach that places limit orders before the release in positions expected to be caught in the overshoot, but that works only for those who have tested the specific fill behaviour of their broker.
Whichever approach is chosen, tick data from past releases is the only reliable guide. A day spent reviewing a dozen releases at tick level teaches more than a month of live attempts.
Which phase of a news candle tends to cost the most on the account being traded, once the fills are laid out?