In the hours before the Federal Reserve Open Market Committee announces their latest take on interest rate policy, I hunker down and trade less, or not at all. Trading just before and for some time after the 2:15 announcement tends to be wildly volatile, and many a trader will lose their shirts by trying risky strategies to game this. One word of advice: Don’t.
Frequently by the end of the day the outcome is not in the same direction as the minutes just after the announcement. Very often the following day chooses a different path as well, particularly if the language issued by the FOMC has changed—it seems the larger players need the time overnight to decide what cryptic Fed-speak means to them….
In the transcript of TrendVue Trader Talk (check the archives after 4:15pm for the full day permanent log) I shall be publishing ideas which may be useful after the announcement, or on the day following.
05.02.02 10:42 #