FOMC Interest Rate Decision due 10.29.2014 at 14:00 ET & Economic Reports

The FOMC interest rate decision is due at 14:00 ET in the US tomorrow ( Wednesday, October 29th ).

FOMC days have different characteristics than other trading days. If you have traded for a while, check your trading notes from past FOMC days that may help you prepare for tomorrow.

I have shared this same post before more than a few times but I do encourage you to read and try to implement as I think tomorrow’s meeting may be even more volatile than the last few. 

if you are a newcomer, take a more conservative approach and make sure you understand that the news can really move the market.

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 1965.00 with a stop at 1959.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 1959.75 and place a stop a few points below in this hypothetical example.
• 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
• This is another great example why a trading journal would be an asset, as you can go back and check your notes from previous FOMC days.

Be patient and be disciplined

GOOD TRADING !