Here is a simple strategy for trading the FOMC Announcement. This is a great strategy if you are day trading the markets. Eight times per year a branch of the Federal Reserve Board, known as the FOMC Federal Open Market Committeemeets to set key interest rates. They also make decisions as to whether to increase or decrease the money supply, known as Quantitative Easing QE. The time of the announcement is crucial here for this strategy and although this can vary from time to time, it is usually at 7: The dates and the time of the FOMC meeting announcement is displayed on the Federal Reserve website.
Then plot the 21 and exponential moving averages EMA on your chart. You can do this very simply on the charts of ETX Capital Trading Platform. At the scheduled time of the FOMC meeting announcement see abovethere is usually an initial big move in one direction — this is known as wave A.
Do NOT execute any trade at this point yet. Incidentally this is the same date when the Feds announced QE3. After the initial big move wave Athere is then a retracement of this move wave B which takes the market to at least the 21 Exponential moving average EMA.
Alternatively, you can scale in to this trade with half size at the 21 EMA, and then add the remaining half to your position at the EMA. What follows is Wave C which is in the same direction as the initial move Wave A.
Close half your position once you have made 3 points on the trade, bring your stop to breakeven, and then use a trailing stop on the 21 EMA for the remaining half. This was follows by the retracement rally wave B. We shorted the market by scaling in at the 21 and EMAs. I have traded announcements before with mixed success and was wondering about the pullback level to enter the trade in. In my last trade I entered on the trade during the pullback and had some success, but I did it with play money because I was unsure of exactly when to enter the market.
Does it work for Forex announcements? Thanks for your comment. Although I have not used this strategy on Forex announcements myself, my best advice is to test this yourself on the FX markets and see if you get positive results with it. Each market will have its own personality of course. Nice and simple Alessio! As always, clear and precise, staying true to the k. No smoke and mirrors like you get form the other so called gurus.
I generally use the fibs for this type of thing. But I will certainly have a 21 ema on chart from now on. Nice simple strategy Alessio, I shall give it a go. Is this pattern also likely to play out on the metals? Hi, Im a little confused, so basically what your saying that the U. S markets are going to belajar trading option di surabaya up when the FED make their announcements?
Strictly speaking there was no setup… however I extrapolated a bit, which I know I should not have done, as assumed the first move was the true move and bought at a low of fake move. Risky but got lucky. Working like a dream on the Dow. The strategy looks very profits interest vs stock options for today!
FOMC Scalping Trading Day | Dow Scalper Futures Trading System
However can you tell me where to find out the TIME when the announcement is made. I believe it is usually at 7.
Obviously, to implement this strategy it is crucial to know fomc trading system the announcement is going to be made so could you tell me where it can be found.
I could not find it on the Federal Reserve Website.
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Moved stop to break-even. Perhaps it maybe wiser to wait until a solid floor is established at the 3pt level before closing out half the position?? Wow, you followed the strategy to the letter, excellent job. I see your point about the floor in the market, but overall it is very difficult to judge that without some objective reference point such as the 21 EMA.
Hi James — the link to the Federal reserve website was posted in the article. Here is the link again: Hi AJ — no not exactly.
This could be up or down. You wait for the retrace and you enter at the 21 EMA in the same direction as the first move. I suggest that you test it to see if it has the same efficacy on those. Hi Sorhash — I cannot say. I have never used it on Crude oil. I personally have seen it work on the FOMC announcement the best.
If you want to use it Crude Oil announcements, you need to test it and see if it works first. Cheers, I appreciate that. I do my best to be concise and clear — and I am glad you have found it fomc trading system. Hi Russ — yes those should work fine as well. Home Alessio Rastani Our Trade Service Trading Tools Blog.
Day Trading Strategy How to Trade The FOMC Australian binary options trading gambling. First of all, what is the FOMC?
Here is another recent example from the last FOMC meeting on October 24th Did this strategy help you? Leave me your comments below. Alessio Rastani is a stock and forex trader at www.
Gold And Silver Outlook Will Precious Metals Rally From Here? Gold and Silver Update Reversal or Continuation on Gold? Chris Theisen December 2, at 7: Hey Alessio, I have traded announcements before with mixed success and was wondering about the pullback level to enter the trade in.
Alessio Rastani December 11, at 7: Ken December 12, at 8: Need to stock up on aspirins before I make such trades.
Thanks for the tips! John December 12, at Sorhash December 12, at 3: Hi Alessio, Does this work on crude oil? Mark December 12, at 4: AJ December 12, at 4: Alan December 12, at 5: Steve December 12, at 5: James December 12, at 6: Jak December 12, at 6: Emilio December 12, at 6: IrishDan December 12, at 7: These instructions could not have been more simple to follow!
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Overall, fantastic analysis Alessio and Kevin — I am looking forward to the next F. Rob December 12, at 7: Well, that worked really well for me today. Alessio Rastani December 12, at Hi Rob — excellent news. Good job on the trade! Thanks Steve — glad to hear it worked out for you. Good to see you made it work.
Alessio Rastani January 30, at 6: Sylwia January 31, at 9: Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them.
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