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Trading FOMC news
Started:April 28th, 2010 (12:24 PM) by shodson Views / Replies:1,523 / 4
Last Reply:August 1st, 2012 (05:56 PM) Attachments:3

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Trading FOMC news

Old April 28th, 2010, 12:24 PM   #1 (permalink)
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Trading FOMC news

Hubert Senters describes this approach to playing FOMC news in this video. I looked at a database of ES charts of 5-min charts of previous FOMC days and it seems like what he's talking about makes sense, as long as you can accurately measure the impulses he describes and have good money mgt in place.

Might be worth a look. News comes out in 2hrs!

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Old April 28th, 2010, 12:24 PM   #2 (permalink)
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Old April 28th, 2010, 04:34 PM   #3 (permalink)
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Use Fib Confluence for Price Moves after News Release

I agree with the video of Hubert Senters and the 3 swings. I think this is what happens:

(1) News comes out: Some traders are hitting the button, this creates a short term impact on price.

(2) Larger traders are waiting in the trenches and trade price back into the area where it has started. But here we need to differentiate:

(a) the news it not expected -> the second swing might be dangerous to trade

(b) price has already anticipated the news during the day -> it can be very rewarding to trade the first countermove, often the expected outcome is discounted by price and the first swing following the release is the final high that traps new with-trend traders

(c) news is as expected -> price moves to support or resistance and retraces back to where it was before the news release

Below is a chart with today's price action and you will notice the impact of two news events

- Unexpected: Spain's downgrade by Standard & Poors
- Expected: FOMC release

The spain downgrade was clearly used by larger traders to trap and take out weak longs. This game is part of many topping or bottoming formations. It clears the market from vermin, and nothing is better than a news release to do this.

The FOMC release was less exciting, but good enough to push price up to the next Fibonacci line.

A note on those Fib lines: Both are confluence zones. The dominant lines of the zones are:

- lower line which stopped price after downgrade of Spain is a 127.2% extension
- upper line which stopped price after FOMC meeting is a 38.2% retracement line

Note that price stopped exactly at the fib line in both cases.

Attached Thumbnails
Trading FOMC news-news-release.jpg   Trading FOMC news-spain-downgrade-stopped.jpg   Trading FOMC news-fomc-stopped.jpg  

Old August 1st, 2012, 12:33 PM   #4 (permalink)
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What traders are expecting or not expecting from fed. Another QE3 or rate increase???
Currencies are completely flatten not much volume or volatility??


Old August 1st, 2012, 05:56 PM   #5 (permalink)
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Bharatiya View Post
What traders are expecting or not expecting from fed. Another QE3 or rate increase???
Currencies are completely flatten not much volume or volatility??

The thread you posted in is over 2 years old since the last post.

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