Lessons from being caught in a scalp during a surprise rate decision

[FXS London Scalper]

Being in a trade when a central bank surprises the market is something many traders experience once and remember. Considering the scenario in advance is cheaper.

A hypothetical case: a trader is in a GBPUSD scalp, having lost track of the time, when the Bank of England announces a surprise cut. Sterling falls 60 pips in minutes. The stop at 5 pips fills at 20 pips because of spread and slippage.

Lessons that follow:

• Set calendar alarms for central bank decisions, not just notes.
• Close or protect trades 15 minutes before scheduled decisions.
• Accept that a stop doesn't guarantee the price in fast markets.
• Size positions so even a slipped stop is acceptable.

Real examples of surprises exist, such as the SNB's 2015 decision on the franc, where slippage was extreme.

It's worth writing the answer down now, as part of the plan, rather than deciding it with the position open and prices moving fast.

What would you do in that situation? Close at market or wait?