I usually trade some news events during the week. One of those is the crude inventory release. The number is released every Wednesday at 17:30 (GMT +2) and on US holidays on Thursday at 18:00. This is an exciting news event since it brings a lot of volume into the market. Last Thursday I traded the news only to find myself after a few minutes with a big loss in my account. The news came out as Actual 4.900M Forecast 0.650M Previous -2.976M. That means there is a 7,87 million barrel difference to the previous number. An increase means always more supply and more supply means the price should fall. And so it did for a few minutes. As the first 5 min candle was closed I opened a position at the previous low. Shortly after that the price rapidly increased. I had my stop at 51,64 which is the high of the first candle. The price just kept increasing until my position was closed. Not that I am afraid of losing, but sometimes I have the feeling the market is doing the direct opposite of what it should or at least what I think it should do. I checked that there were no other contradicting news released that could have mixed the sentiments. How on earth did the market analyze the news as bullish for the oil price??!
The price just returned back to its original level like the market would have said "nope you are wrong, I will knock you out!". In my opinion it is not worthy for a single trader like me to enter any trades during the first 5 minute candle: the first 5 minutes tend to be very volatile and entering a trade could be affected by high slippage or an instant stop order. I have also noticed that the market often overreacts and the price will eventually change direction after the first candle like in this case.
