Discover the simply 4-step process for trading FOMC announcements. See the setup, entry method, risk management procedure and how to exit. What will Janet Yellen say? How will the market react? Those are good questions. Give that gravy train up, because high frequency trading and algorithms have the humans beat.
It is a game we cannot win anymore. Eventually a 5-minute candle will move against the initial burst. It may be the next candle, or one that follows. Use a stop loss that is the lesser of 3 points, or just above the closing price of the initial burst below the close if the initial burst was to the downside. For example, if the price is 2, on the ES contract, set your entry for 2, If you are going long, place the order at the 0.
This will skew the probabilities in your favor, as big orders fight for round numbers. This trade is good for a few candles, but I caution you not to get greedy. If you can pull 4 or 5 points of profit, that is a great trade for step 3.
Trade approaches the period EMA near I closed out my trade at 2, Keep trailing your stop loss every 15 minutes, or 3 bars, and set it 1 point under the period EMA 1 point above EMA if you are in a short trade.
This trading strategy is surprisingly reliable. George Papazov has over fourteen years of trading experience in currencies, stocks, futures and options.
Sign-up and get access to the first 8 lessons for free; over 12 hours of serious training for the serious trader. Hi I would like to try out this method. In fact, by trading these ETFs you are trading futures indirectly. Try the product you are comfortable with, and go back on the charts to the last 4 fed announcements. Would be interested to hear how that simulation experiment goes.
Let me know if you have any other questions. I also use a 21 exponential moving average EMA for trend and support analysis.More...