After a few months of observing ES, I decided to stop trading or close my positions about 10 minutes before any economics release. Yesterday, I felt confident to get short at the open for the strong resistance at around 998 - 1000 level, but I didn't take the trade because insecure of what could happen with the 10 am CC report. From previous replies, it seems that a number of people successfully play economics releases. I tried a couple of time to put orders outside the range that usually appears before any major economics release, but the volatility is so high that I run into troubles. Is any of you confident to play all economics reports? Any successful and consistent strategy? I think that a successful strategy should be market neutral because nobody can really tell what the release will show and how the market will react to it.
Yes. However, I assume that you want to be in at the very beginning of the move and that you want something that's indicator-based?
Actually I've found false moves and countermoves to be the norm, rather than the exception. I realize that didn't happen with the CC report yesterday, the market smoothly tanked so a simple bracket entry would have been very effective. But the reaction to the Fed Beige book today was more typical, first it spiked up stopping in the long side of the bracket, then made a countermove down stopping the longs out. This is in line with what rickty said earlier: As another type of "report" pattern, I've found that Greenspan moves generally go in 3 waves, the initial move (in the eventual direction), then a strong countermove, then the final move in the same direction as the first.
Yes and no. Reactions to the reports in general, except for Consumer Confidence and Michigan Sentiment, and sometimes the ISM numbers and Leading Indicators, have been subdued to say the least for several months now. But when I say "countermove", I'm not referring to the jockeying for position, but rather to the more obvious reactions such as occurred with last month's CC number.
After a few months of observing and spastic daytrading the ES market, I finally started to trade for real in July. I have become a "discretionary trader" and think that beside the necessary knowledge, the right mindset is key to be successful discretionary traders. I must keep a fresh, focused and open mind to read the market and react to its moves in the proper way. I must be in the moment and in the flow. All that might sounds easy on paper, but in real life trading when you have your money in line and tension builds up, some minutes of delay in reading the market or reacting to it or being lost in some thoughts like "the market is too expensive" can be very dangerous. Observation, practice and simulation and keeping good journals are of great help. I think that trading is an art of self improvement.
Today the reaction to the 10a reports is a perfect example of what I was talking about, strong move, then strong countermove. Like I said, it's not uncommon.
I agree as to the example, but I'm not going to argue as to whether it's common or not. There are dozens of reports, each of which leads to its own reaction, if any, each of which depends on the trading environment and the time of year. Rather than assume that these moves are going to take place, one would be wise to review old charts and see for himself just what the reactions have been and when. He can then decide for himself whether or not he wants to play them and, if so, how.
I don't play economics releases and I'm going to be on the sidelines for a while this morning. I'm positive that many of you made a lot of money, but the volatility that appears with economic releases is usually too much for my nerves. Perhaps, in a few I'll have enough guts for them.