The execution problem
Around a high-impact release three things happen at once, and all three work against a retail order:
- Spreads widen — sometimes tenfold — as liquidity providers step back.
- Liquidity thins, so even a small market order walks through several price levels.
- Price gaps. There is no trade at the prices in between; a stop at 1.0850 fills at 1.0838 because 1.0838 was the next price that existed.
Slippage in normal conditions is a fraction of a pip. In the first seconds of a payrolls release it can be tens of pips, in either direction.
Why the straddle fails
The classic beginner idea: a buy stop above and a sell stop below, "so I catch it whichever way it goes". In practice both trigger — the first spike goes one way, the reversal goes the other — and both fill with slippage on the wrong side of a widened spread. The trader is short and long at once, with two losses, before the real move begins.
Two honest approaches
Trade after, not through
Wait for the first move and the retracement. Trade the direction that holds after the first five to fifteen minutes, with normal spreads and a stop the market can actually honour. You give up the first 40 pips and keep the next 60.
Position before, sized for the gap
If you hold a view, enter well before the release with a stop that assumes the worst plausible fill — and a position size computed from that wider distance, not from the nominal stop.
Summary
News means wide spreads, thin books and gaps. Do not straddle. Either wait for the market to settle, or enter early with a stop and a size that already assume the slippage.