FOMC Tomorrow & Trading Levels 6.19.2019
Posted By:- Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
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According to CME Group’s FedWatch tool, the chance for a rate cut on Wednesday dropped from 23.3% on Friday to 17.5% Monday and back to 24.2% today!!
The market will certainly be paying attention to the language, even in the absence of a cut.
The following are my PERSONAL 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 2919.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 2919.75 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!!
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Posted in: Future Trading News