Don’t Trade FOMC
Market Order Slippage on FOMC Announcements
Hello fellow traders. Marv Eisen here, from Timeless Dollar Trading Academy. Trading is like trying to predict the future. If you’re good at predicting the future, you’re going to be great at trading. The problem is that nobody can predict the future, so how can traders trade successfully?
To trade successfully, look at some of the certainties of the market. Take price candles for example. Candles are the daily price movements ranging from high to low – or low to high. What is common about price candles is that they have a beginning and end. – but is the beginning at the top or is it at the bottom? That is the trick.
So how do we know which end of the price candle is the top and which is the bottom – where do prices begin the day and where do they end? The most important thing any trader wants know is where is the market going to go today? Is the opening price at the top and will prices decline, or will they rise from the open? Are prices going to go down or will they go up? Which end of the candle are we seeing at the open – the top or the bottom?
George Taylor’s work back in the 1950s is useful in helping traders decide which end is which, and how to trade once a trader determines which end of the candle prices are trading.
This video shows the calculated range for Wednesday, December 18th, which happens to be an FOMC announcement day. FOMC is Federal Open Market Committee meeting, where 8 times a year the Federal Reserve sets interest rates. Interest rates are key to what the equity markets are going to do.
One of the things I tell traders who are just starting out is that on FOMC days don’t trade around the time that the announcement is made. It’s always made on a Wednesday at 2:00 PM because the market tends to whipsaw, then moves very quickly.
Look what happened at 2:00 PM at the announcement, at how fast prices moved. If you place a market order, you can’t get out. Especially when the market is going to drop because nobody is going to catch a falling knife. Your order is going to sit there until the bottoms out and stabilizes. If you’re on the wrong side of the market you’re going to lose a heck of a lot of money, so you don’t want to be that guy,
if you want to learn how to trade or learn about the Taylor Trading calculator, go to Timelessdollar.com. Remember to be patient and learn to spot the correct entry price, and use the Taylor Trading calculator to know where to close your trade.
Keys To Learning How to Trade
Anyone who wants to learn how to day trade S&P emini futures needs to have as much information as possible in order to help determine where to place a trade. Trading is not easy to do because it is impossible to know the future with any degree of certainty. But the market does give off signals and a wise trader needs to know how to interpret the signals. Market prices seem to move erratically, but with enough information, trading S&P emini futures can be done with a greater assurance of success. An S&P emini futures trader who has Information about market signals and knows how to use them makes knowledgeable traders much more successful than others who use “seat of the pants” method.Â
Some of the information that S&P emini futures traders should have are:
- The Trend
- The Intraday and / or Low
- The Calculated Trading Zone via Taylor’s Book Method
- The daily calculated range
- Support and resistance levels
- Stochastics
- Candlestick patterns
These are some of the bits and pieces of information every trader needs to have in order to assess a trade. Of course, that is not to say that even with all this information a trade will work out, but having this knowledge puts the odds of success more on the trader’s side.
Having as much information as possible gives S&P emini day traders a big advantage over “seat of the pants” traders. It cannot be stressed enough that without learning as much as possible about the market, it is highly unlikely that a trader will succeed at making money by day trading S&P emini futures, much less in a trading career.
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