Cannon Trading Futures Blog: Daily Support and Resistance Levels

Here are few suggestions if you plan on trading the Federal Open Market Committee meeting. I  highly recommend that if you must carry position through the announcement you have a very minimal position to your account balance (meaning having 3 to 4 times the overnight margin per contract).  I feel though that it is always better to enter into the number with a flat position.  Most announcements market volume and volatility pick up to above average trading conditions which can make it very difficult to see the trend.  I recommend that you trade with support or résistance numbers and that you use the widest numbers usually 7 – 10 points away from where the mkt is trading at the time of the announcement.  You do not want to chase the mkt because most likely it will chop you to pieces.   If you pick your spots wisely, like buying or selling with résistance and support or waiting for those numbers to be broken you will increase your chance of successful trading on that afternoon.  Also remember higher volatility means more mkt movement so tight stops usually get eaten fast so trade with wider stops and less contracts for better results.  Be careful,  trade smart,  and pick your spots wisely and this could improve your trading on FOMC announcement day.