South African traders quickly notice that markets often move in repeatable ways after big data releases and policy events. Jobs numbers, inflation surprises and South African Reserve Bank announcements rarely create completely unique reactions. Instead, they tend to fall into patterns that repeat with variations. The question is how to turn those patterns into practical trading insight rather than vague memories of wild candles on USDZAR.
A structured way to do this is by building your own tests around the economic calendar. Instead of trading every event on gut feel, you can go back through past releases and check what usually happens in the minutes and hours after the numbers hit. This kind of research is within reach of retail traders in Johannesburg, Cape Town, Durban and smaller towns if they focus on a few simple studies.
Why Backtesting News Matters For South African Traders
The rand is heavily influenced by both local data and global events. Without evidence, it is easy to convince yourself that every announcement is special. Backtesting cuts through that illusion.
When you examine how USDZAR, EURZAR or GBPZAR behaved after similar events in the past, you start to see:
- Whether the first spike usually continues or fades
- How long volatility tends to stay elevated after a release
- Which events genuinely move the rand and which ones only create noise
This information does not guarantee the future, but it gives South African traders a base to work from. You move from guessing to acting on observed tendencies.
Backtest 1: Average 30 Minute Move After SARB Rate Decisions
The South African Reserve Bank decisions are key events on the local calendar. Markets care about both the rate change and the tone of the statement. A simple first test is to measure how far USDZAR typically moves in the 30 minutes after the decision.
Take the last 10 to 20 SARB meetings. For each one, note the opening price on USDZAR one minute before the statement and the price 30 minutes later. Record the size of the move in pips and the direction. Over a decent sample you may discover that:
- The average move is large on surprise decisions and smaller when the outcome is expected
- Even on quiet meetings, there is often a minimum range that repeats
- The pair sometimes overshoots in the first five minutes and then settles into a clearer direction
For a South African trader, this backtest helps set realistic expectations. You can decide whether your strategy belongs in that 30 minute window or whether conditions are too wild for your style.
Backtest 2: First Hour Volatility After US Nonfarm Payrolls
Even from South Africa, United States employment data remains one of the most watched events in forex. It shapes expectations for US rates and global risk sentiment, both of which influence the rand.
For this backtest, focus on USDZAR and at least one major such as EURUSD. For each recent nonfarm payroll release, capture:
- The high and low of the first 60 minutes after the announcement
- Whether price closed that hour nearer the high, low or in the middle of the range
- The direction of the final close relative to the pre news price
Patterns you might see include a wide first candle followed by consolidation, or a fake move in the first few minutes that reverses and runs in the opposite direction. Knowing which behaviour appears most often helps South African traders plan whether to trade the first reaction or to wait for a secondary move.
Backtest 3: Post CPI Moves On USDZAR And Local Sentiment
Inflation releases matter for both South African and global policy decisions. Another valuable test is to look at how USDZAR behaves after South African CPI and after United States CPI.
For each event, record the size of the surprise relative to forecasts and the movement in USDZAR over the next two hours. Then divide events into three buckets: higher than expected, in line with expectations and lower than expected.
You may find that:
- Larger positive surprises in local CPI often hurt the rand if they raise fears of tighter policy and slower growth
- US CPI surprises that shift rate expectations can move USDZAR even more than local CPI
- In many cases, the biggest part of the move finishes within the first hour, leaving the next hour to retrace part of the spike
For South African traders who worry about being caught in unpredictable moves, this backtest shows where the real danger lies and how long it usually lasts.
Backtest 4: Fade Or Follow The First Spike On ZAR Pairs
A very practical question for rand traders is whether the first post event spike is usually a trap or a genuine start of a trend. This can be tested on several ZAR pairs around the same type of event.
Choose a repeating event such as SARB meetings or US payrolls. For each one, mark the direction of the first five minute candle after the release and then check where price sits one hour later. Count:
- How often the one hour direction matches the first spike
- How often the market reverses and closes beyond the opposite side of the initial move
- How many times price stays inside the early range
If you discover that reversal is common, fading the first spike with strict risk control may be more logical for your style. If continuation dominates, it suggests that South African traders should focus on catching early momentum rather than fighting it.
Backtest 5: Session Based Behaviour After Local Data Releases
South African data often drops during local business hours, but the full reaction can stretch across the London and New York sessions. A final backtest is to map how ZAR pairs behave from one session to the next after a significant local release.
For each event, note the following:
- The net move from release time to the end of the South African session
- The additional move, if any, during the later London and New York trading hours
- Whether volatility rises again when overseas traders digest the same data
This helps answer questions such as whether it is safer to close positions by the local close or whether trends often extend into the global evening. For South African traders with day jobs, this knowledge matters when deciding whether to hold positions overnight.
Turning Research Into Everyday Discipline
These five backtests are not about building a complex mathematical model. They are about giving South African traders a clearer sense of what usually happens after the events they see on the calendar every month. Once you know the typical size and shape of post event moves, you can align your position sizing, stop distances and trade timing with reality instead of hope. You may choose to avoid certain windows entirely, or you may identify a niche that fits your temperament and schedule. In either case, your decisions are grounded in your own evidence, built from the same charts and economic cycles that shape life in South Africa every day.
