We're all familiar with the charts produced by news events that cause a sudden and massive expansion in volatility, as shown below in this example from my blog archives.

(If you’re interested in the blog post associated with this chart, and an examination of the retest of support, you’ll find it in the YTC Newsletter signup bonus ebook, “The LOST Files – 150 Lost YTC Blog Posts”. Search for the following post: “Looking Inside a One Minute Bar”.)

news event changes bias

However the majority of the time a news event results in a much less dramatic outcome.

So when a news event turns out to be a bit of a non-event, should we discard it as being insignificant and simply carry on with our prior directional bias?

Not necessarily!

As seen below on the Euro, news events from last Friday and then again on Monday produced candles which would not be considered significant, when comparing their range (H-L) with prior candle ranges.

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