Discussion in 'Trading' started by crgarcia, Sep 15, 2007.
It is foolish to have trades open during the Fed meeting... Don't predict!, react!
It doesn't matter if you expect a rate cut, or not: Don't predict!, react!
I'd bet everyone is out before it because everywhere I see its said it will sell off when it comes out.
To me, that means its good odds no sell off because everyone already sold.
Have you seen how thin the DOM gets minutes before a major Fed announcement? And then how levels disappear in millisecs as prices whips around right after? Why anyone who daytrades would want to be in a position before that is beyond me, but maybe I am just a scared little rabbit
dont overthink it
Nothing to do with it.The market is not some monster to fear. Whatever your position before the Fed announcement keep it or change it (and keep changing it as required) so you follow the ES or YM technically in what is usually a fast market as it digests the announcement. Use a finer tuned signals set within your systems complex.
i never ENTER a trade within a 1/2 hour before the announcement (note: TRADE ... i am always in numerous investments) but if i am in a trade from before then, i will stay in. the key is this fantastic device called a stop loss
i trade YM
if im up 15 ticks, and have a trailing 5 tick stop loss, of course i'm gonna hold it. worse case scenario is the market moves against me and i get stopped out for a profit. of course when it moves really fast you can get 2-3 ticks of slippage. otoh, it can move with you and next thing you know, you are up 30 ticks.
This is probably the best advice. It is probably smarter to close all positions, lock in your profit or loss, and then reopen once Fed announces. This is the most important Fed announcement in a decade and major volatility is possible.
Actually, you make an even better point.
As to the comment above about what's been going on in large positions into the announcement: the nice moves we saw over the past week were generally short-covering moves (i.e. brokers, mortgage related, materials/construction). I would say, regardless of what it seems like most have been expecting or predicting, its the shortside that is exiting into the meeting.
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