How market volatility affects execution and what traders should expect

Volatility is a hot topic for financial educators, traders, and investors. If you are unfamiliar with the term, it refers to a scenario where market prices rapidly rise and drop within a very short period. Depending on their trading or investing style, some skilled or even professional traders may actively avoid or choose to trade during volatility.

Although potential rewards may be more significant during volatility, the risk increases exponentially.

Although there is no direct correlation between volatility and execution, trying to open a trade while prices are moving rapidly can lead to price differences between what a trader expects and what they get. It’s like trying to hit a rapidly moving target with a ball, something that’s relatively challenging. In the best-case scenario, your trade may open at a more beneficial rate. In the worst-case scenario, your trade opens at a rate that causes unforeseen losses or yields a smaller return than intended.    

Exness helps traders mitigate this by filling their orders at the best market price available at the given moment. Thanks to a robust infrastructure of strategically located servers worldwide, their order execution* is both fast and reliable.

What causes volatility?

Several factors fuel volatility, but in simple terms, it occurs when traders are unsure about an event, news item, or political occurrence that will affect the markets. Here’s a more specific breakdown of these factors.

News

Information can come from any source, but as long as it reaches an audience of market participants likely to spread market-moving news, that information can have an impact. These include traditional financial media like Forbes, Bloomberg, and the Wall Street Journal, as well as social media and trading communities like those on Discord.

Geopolitics

During the beginning of 2025, the new US administration waffled on tariffs. The enacted ones triggered retaliatory tariffs from the targeted countries, resulting in volatility as markets feared a rapid increase in inflation. Another example is the frequently unfulfilled promises of regulations during the early years of cryptocurrencies going mainstream. These caused the price of the potentially targeted tokens to fluctuate wildly.

Macroeconomic events

Most countries release reports and make announcements regarding various factors affecting their economies. They can cover industrial output, interest rates, and gross domestic product (GDP). Most of these reports and announcements, or at least the most impactful, have forecasts based on current market conditions and previously released reports. If the announcement doesn’t match these forecasts, it can cause volatility, especially if the mismatch is unexpected.

Corporate events

Announcements on earnings, cash flow, income statements, changes in equity, or even the public’s reception of a newly announced or released product can cause market volatility.

Exness execution and volatility

Exness offers reliable execution that allows traders to respond to market movements in real time*.  They also offer tight and stable spreads**, giving traders the ability to trade high-impact market news while keeping costs low, and order execution precise.

The broker also offers unique added protections like 0% Stop Out***, a proprietary feature that helps delay or avoid stop outs, as well as Negative Balance Protection. This allows traders to navigate volatility with more confidence.

* Reliable execution claims refer to average slippage rates on pending orders based on data collected between 2024-09-06 to 2024-09-12,  2025-01-24 to 2025-01-29 and 2025-05-27 to 2025-05-29 for gold on Exness Standard account vs similar accounts in 3 other brokers. Delays and slippage may occur. No guarantee of execution speed or precision is provided.

** Stable spread claims refer to maximum spreads on XAUUSD, USDJPY, EURUSD, and GBPUSD for the first two seconds following high-impact news. This comparison is made between the Exness Pro account and commission-free accounts of several competitors, all excluding agent commission, from 1 January to 23 August 2024.

***On average, Exness has 3 times fewer stop outs than competitors. Analysis covers orders for April 2025, comparing Exness’s 0% stop-out level to 3 competitors’ levels (15%, 20%, 50%). To normalize extreme ratios, stop-out results have been square-root transformed, values rounded to the nearest whole number, without taking into account the conditions that indirectly affect the stop out.