Chairman Powell speaks rate decision tomorrow @ 1:30 CDT ,30 minutes following the official DECISION ON THE FED FUND RATE., U.S. Secretary of the Treasury Scott Bessent will testify to the House Financial Services Committee hearing on the international finance system Wednesday morning around 9:00 am CDT.

The following are suggestions on trading during FOMC days:

·    Reduce trading size

·    Be extra picky = no trade is better than a bad trade

·    Choose entry points wisely. Look at longer time frame support and resistance for entry. Take the approach of entering at points where you normally would have placed protective stops. Example, trader x looking to go long the mini SP at 2925.00 with a stop at 5619.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 5619.75 and place a stop a few points below in this hypothetical example ( consider current volatility along with support and resistance levels).

·    Expect the higher volatility during and right after the announcement

·    Expect to see some “vacuum” ( low volume, big zigzags) right before the number.

·    Consider using automated stops and limits attached to your entry order as the market can move very fast at times.

·    Know what the market was expecting, learn what came out and observe market reaction for clues

·    Be patient and be disciplined

·    If in doubt, stay out!!

Trading levels for FOMC day:

Ilan Levy-Mayer, M.B.A

Vice President
Cannon Trading Co, Inc. Est. 1988
www.CannonTrading.com
Toll Free: 800-454-9572
Int'l: +310-859-9572

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Trading commodity futures and options involves a substantial risk of loss.
The information here is of opinion only and do not guarantee any profits.
Past performances are not necessarily indicative of future results.