How Economic News Changes Liquidity

Why can the DOM look completely different after economic news?

Major economic announcements can change expectations quickly.

Market participants may adjust quotes, cancel orders, submit new orders, or react to changing prices.

As a result, displayed liquidity and the spread can change rapidly around a release.

A footprint chart may also show unusually large executions as the market responds to new information.

But heavy trading during news doesn't guarantee continuation in the initial direction.

Before trading a major release, I consider whether my strategy has been tested under those conditions and whether slippage could exceed my normal assumptions.

A familiar setup can behave very differently when market conditions change suddenly.