NFP Risk Management: Binary Event Position Sizing and Protection

NFP is the clearest example of a "binary event" in forex — a data release that can go either direction with significant force. Here's how to protect your account: **Rule 1: Define your NFP exposure by Thursday close.** Calculate your total USD exposure (positive or negative). This is your binary event risk. **Rule 2: Maximum binary event exposure = 1.5% of account.** If you're holding trades that would lose 3% on a sharp USD move, you're too exposed. Cut to half. **Rule 3: Spread reality check.** EUR/USD spread at NFP release typically widens to 5–15 pips. If your stop is 20 pips away, the effective stop on execution might be 30–35 pips. Size for the worst-case fill. **Rule 4: Post-release reset.** After the first 15 minutes of NFP, reset your risk framework. New positions should use normal 1-2% risk sizing. **Rule 5: Have a clear "skip the release" threshold.** If you have meaningful open risk, sometimes the correct answer is to close everything Thursday and re-enter Friday afternoon with fresh eyes. What's your standard position size adjustment heading into NFP?