2 CRAZY ES trades tomorrow for Fed Day...so radical...could you handle them?

Discussion in 'Index Futures' started by increasenow, Oct 30, 2007.

  1. TRADE 1

    Buy 1 ES
    Short 1 YM

    both at say 2:10pm...whenever "trend" is determined after Fed announcement you trade out and "ride the other"...sound profitable or what are the risks you see?

    TRADE 2

    AT 2:10PM

    enter "buy stop" order for 1 ES 2-3 points or so away from current price

    enter "sell stop" order for 1 ES 2-3 points or so away from current price

    market will go in one direction...one order is filled and you cancel the other...ride it to profit...sound realistic or what are some concerns?

    ...or what are some even more radical trades at 2:10pm tomorrow...PLEASE, in advance, I am very serious and not joking around with a "senseless post"...there are many that would want to view the feedback on this same issue...many are already "thinking it"...thanks!
  2. BWitt


    Take this for what it's worth, just my opinion. The last Fed decision was a 1/2 rate cut, which was a bit unexpected, which led to the shot to the moon. A breakout play there was obviously very profitable. But let's look at this Fed decision. Fed futures are factoring in a probable 1/4 cut. So, if they do what is expected than how much more upside is left? I've traded through more than a few Fed decisions and, unless they do something that is totally unexpected, there is often some whipsawing before a trend is established. ES shoots 5-8 points, then retracting its initial move, then finding its way. If the Fed does NOTHING than you'll see your ladders head to hell...
  3. BWitt


    so to answer your question, no, i am not going to initiate a breakout trade tomorrow. but assuming you've taken on the responsibilities of being a trader than you'll make your own decisions and accept the risk given the info available (price action) leading up to the announcement.
  4. Why predict? The initial moves after 2:15 are violent with huge spikes fades etc. Just wait till 2:50 or so and ride the trend into the close. Must you have every single point?
  5. BWitt


  6. Lets put it this way...

    Many have already done their homework and backtested this theory on at least 10 years worth of FOMC announcement intraday price reaction.

    You should do the same and the risks/rewards will be revealed in your backtesting info.

    Do the homework.

  7. First of all you don't say whether the stops are placed above or below the market. Secondly, assuming they are not hit before the announcement, those orders are way too close to the market to get filled. The market is likely to blow right past those orders and they won't have a chance to get filled. Better to wait until the announcement,; observe the market reaction, and trade very gingerly, if at all, thereafter. The market can and does turn on a dime on these FOMC days.