The news straddle that looks great in theory

[Amanhasnoname]

The idea is simple: place a buy stop above and a sell stop below the market a few seconds before a release, catch whichever direction price takes, and cancel the other. It sounds like a free trade.

In practice, the problems stack up. Spreads widen right at the release, so the stops sit farther from the true price than planned. Fills slip, sometimes by several pips. The first move often reverses, so the trade is caught in the wrong direction and the stop hits on the other side as well.

Backtests on candle data make the strategy look excellent, because the data hides the spread and the order of events inside each bar. Live results are usually far worse.

Brokers also respond. Some widen quotes, some pause trading, some restrict pending orders in the minutes around releases.

If someone insists on trying, it needs tick data with real spreads, a demo test during live news, and a very small live test before anything serious.

Has anyone tested a straddle live, and how did the results compare with the backtest?