Futures Economic Numbers & Reports

Volatile reaction/ market action to FOMC. More than I expected to be honest.

I always find the day after FOMC to be more revealing about the short/medium term trend, so will be interesting to watch market action tomorrow.

In between remember that September is now FRONT month for all indices/ currencies/ financials.

Remember money management can be more important than reading market direction and you can have a successful trading day even if it ended up being in the red, as long as you followed your rules and stayed discipline. Sometimes you can do everything right and still lose, it’s called trading…..

The FOMC interest rate decision is due at 14:00 ET in the US tomorrow ( Wednesday,  April  30th).

This FOMC will follow more than a few important reports that will be released earlier in the morning, so I expect a volatile session. 

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.

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 1875.00 with a stop at 1869.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 1869.75 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

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