As traders we have three basic rules. We can:
- Go long, or
- Go Short, or,
- Do nothing at all…
Rule 3 is perhaps the most overlooked yet clearly the most important. There are many times when being in a market or a stock makes no sense at all. FOMC announcement dates are one of those times for futures scalpers.
Ahead of an FOMC announcement I limit my futures trading to the first 90 minutes or less if the volume drops off. Leading right into the 2:15 pm release volume is generally very low and often wild swings both up and down start to happen in the minutes before the release at, and certainly after the release. Generally I do not weigh into the fray until well after 2:15 pm and I never have open futures positions nor stop-to-enter orders in place before the news release.
If there is any change in language in the announcement, it often takes the market a surprising amount of time before coming to a conclusion as to direction for the balance of the day. Be careful!
04.12.14 09:14 #