Putting an OCO order on FOMC days

Discussion in 'Index Futures' started by Tom1234, Sep 18, 2007.

  1. Tom1234


    Has anyone tried to put an OCO order(i.e. e-mini S&P, e-mini Russell) in right before the Fed announcement? You put in a buy order 4 pts above the current price with a sell stop and a sell order 4 pts below the current mkt price with a buy stop in place. I haven't tried it but I think it will work well.

    Any thoughts?

  2. Had a user do one today on a buy stop. He got 83 pts of profit on the YM.. Was slick.
  3. The strat would work, assuming your stop isnt too far away.

    But you only get these types of big one way moves after an FOMC announcement perhaps once or twice a year.

    The other times (when the fed doesn't surprise or change its wording) there is a greater than 50% of getting stopped out, or if you dont get stopped out you might only make a fraction of the profits compared to today.

    Over all you might only make 25 ES points a year when you include all the losers and the smaller winners.
  4. As soon as there's a "whipsaw" day, when you get filled on all four orders resulting in a big loss, you won't ever want to do it again, ever.
  5. It's simple, get a list of all the past FOMC Announcements going back several years and then correlate that with your historical intraday charts.

    Next, determine how your OCO 4 pt rule or any other specific number would have performed.

    My point, FOMC Announcements is not the time to be trading via something that hasn't been tested.

    With that said, as someone else mention, yesterday's FOMC price movement like that doesn't happen often.

    Best to just stick to your normal trading plan unless your normal trading plan involves OCO 4 pt rules on trading days where there's an expected strong parabolic price movement via particular key economic report releases.

  6. jwecme


    You place a market buy/sell order with very small 1 poitn stop with taregt at next resiatnce suport area if that is below 5:1 r/r reject. Slippage should not be over a poijnt in something liquid like ES thats the most slippage i ahve ever got with an order like this.