I’ve noticed that when major economic data drops, spreads on HFM widen significantly. I understand why it happens but I’m trying to figure out if the rebates actually cushion that impact enough to justify trading through the spike.
Last week I traded the Fed announcement and my spreads jumped from 0.9 pips to over 3 pips on EUR/USD. The rebate I got back was helpful but nowhere near enough to offset that kind of movement.
I’m curious how other traders handle this. Do you avoid trading during events altogether? Do you scale position size down? Or do you have a threshold where the rebate plus your edge on the trade still makes it worth executing?
I want to be realistic about when rebates can actually offset costs versus when the market conditions are just too expensive, no matter what the cashback service can do.
Skip major news events unless you have a specific edge.
Rebates help but don’t change the risk on wide spreads.
The math is simple. If a news event typically widens spreads 2 pips beyond normal, your rebate would need to be 2 pips or more to break even. Most rebates are 0.3 to 0.8 pips depending on the broker.
I stopped trading major news events unless I’m holding the position through the event expecting directional movement. If you’re in and out around the data release, the spread cost kills you even with rebates.
What I do trade: Tier 2 data that moves markets but not as violently. Weekly jobless claims, PMI revisions. You still get volatility but spreads don’t blow out as much. That’s where rebates actually earn value.
I usually reduce my position size before major news. Same trading strategy but smaller, so if the spread widens it doesn’t hurt as badly.
The rebate is a bonus on top of that, not the main strategy. You can’t rely on cashback to cover bad execution conditions.
I’ve found that trading 30 minutes after the data release works better anyway. Volatility settles and spreads normalize while the trend is still forming.
Most brokers publish their typical news spreads somewhere. Check HFM’s data before you start trading around events.
I tested this on my account last quarter. Traded the same strategy during normal hours and around FOMC announcements.
Over 20 trades each, the news trading made less money even with rebates. The wider spreads and slippage cost more than my edge could make back.
Now I treat news events as time off. My rebate rate is the same whether I trade or sit out, so there’s no bonus for forcing trades into bad conditions.
The real money for me comes from regular market conditions where my strategy works consistently. Adding rebates on top of good execution is where it compounds over time.