Trading off reports

Discussion in 'Economics' started by steve46, Mar 29, 2004.

  1. Hello folks:
    I searched and did not find comments relating to strategies for trading around reports. There are a lot of articles on the subject and I know of several strategies that are used by profitable traders as follows:

    In preparation for news following Fed Meetings, and Employment reports, I know that Steve Cohen used to position himself so that he would "fade the spike". This type of trade is more art than science and requires experience and a fast hand on the keyboards, or alternatively a well thought out plan and an automated order execution system. Cohen of course, had all of those tools at his disposal. Simply put, he place a bracket order (OCA) to buy/sell the S&P, a basket of equities and often a select group of metals, energies (oil & nat gas for instance) and bonds, hoping to make a quick profit on the emotional response to an announcement.

    I used to use this technique with bonds, however it is hard to maintain from the west coast because of the time differential. For traders on the east coast, it may be profitable to look at the 30 year and 10 year bond for this trade. It used to work quite well after employment, Fed Meeting, and note auctions.

    It seems to me that this is the analogue of the opening order play that Don Bright uses for equities, and as such it may not be quite as effective as it used to be. One of the setup conditions for the bond trade was that the preceding day had to be a narrow range bar (NR4, or narrower than the preceding 4 days).

    I look forward to hearing your comments or thoughts relating to this type of trade. Best Regards, Steve46
  2. STEVE.... news plays used to be good .... BUT I havent played them in months.... why??? month after month of relatively small monthly gains combined with severaL BIG LOSSES. After the trade it always looks so easy looking at the chart,,,,, bbut in real time i do not even try it not want to dull your enthusiam but just trying to share my experience.