Fading news spikes: what's your rule for trading the overshoot?
A release spikes price far beyond what the data justifies, and the fade trader sells the overshoot. The entry must be fast, the stop tight, and the discipline absolute — the spike can extend before it reverts.
Do you fade spikes?
- the conditions that make a fade valid
- how you time and size the entry
- the spike that kept going and taught you the stop
The bid, ask and slippage guide explains the fills you'll get in those seconds.
Background: Bid, ask and slippage: why your order fills at a different price
Why buy trades open at one price and close at another, why a stop can trigger when the chart never touched it, and how slippage happens.
Why did my stop-loss trigger when the price on the chart didn't reach it?
Charts usually show the bid price, but a sell position's stop is triggered by the ask. If the spread widened, the ask could have touched your stop while the bid line stayed away from it.
What is slippage?
The difference between the price you expected and the price your order was filled at. It is most common in fast or thin markets, such as around news releases.
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