1. Major News = Massive Volatility
High-impact economic events such as Non-Farm Payroll (NFP), Federal Reserve rate decisions, CPI/unemployment data, and central bank speeches often cause sharp, unpredictable price movements—sometimes hundreds of pips within seconds.
These sudden spikes can:
- Cause slippage
- Blow through stop-losses
- Trigger large losses when using high leverage
Tip: Reducing leverage before these events gives traders better control.
2. Reducing Leverage = Reducing Risk
When a broker temporarily lowers leverage (e.g., from 1:1000 to 1:200), it forces traders to:
- Trade with smaller position sizes
- Keep losses within safer limits
- Avoid margin calls due to overexposure
At EMAR Markets, this reflects our commitment to trader protection—because long-term success starts with capital preservation.
3. Preventing Account Wipeouts & Negative Balances
During high-impact news, the market can gap or move so fast that even stop-losses can’t trigger at the expected price. This puts traders at risk of:
- Account wipeouts
- Negative balance situations
- Chain margin calls
By lowering leverage, brokers help minimize these risks. EMAR Markets also provides negative balance protection, so you’ll never owe more than your deposit.
4. Promoting Responsible Trading Behavior
High leverage can be tempting, but it often leads to impulsive decisions. When leverage is reduced:
- Traders think before entering a trade
- More emphasis is placed on strategy over luck
- Risk-to-reward ratios become more realistic
This leads to better discipline, especially for new traders learning how markets react to major news.
5. A Sign of a Transparent, Client-Focused Broker
Brokers that allow full leverage during NFP or FOMC may not have your best interests at heart. At EMAR Markets, we reduce leverage during these events not to limit your opportunity—but to protect your future as a trader. We want clients to trade longer, smarter, and safer.
Pro Tips: How to Prepare for News Trading
- Always check the economic calendar
- Avoid entering large trades just before high-impact events
- Use pending orders or wait for price stabilization
- Focus on risk management first, reward second
Conclusion
Reducing leverage during news isn’t a weakness—it’s a wise risk-management move. Brokers like EMAR Markets implement this policy to protect you from excessive losses and provide a more stable trading experience. In trading, survival comes before success—manage risk first.
