I Despise FOMC Days

Posted on Dec 17 2014 - 3:31pm by Sharpe Trade

Yeah, big surprise.  The Fed Fund prime interest rate is left alone.  Yeah, we didn’t see that coming (/sarchasm)

But that’s not my point here.  My point in writing this, is to do you a favor.  A favor both to your sanity, and to your short-term trading.

Bookmark this site, that provides a calendar of the meetings of the Federal Reserve, dates that the Fed releases decisions on the rate, and FOMC minutes, etc.  When the calendar for 2015 has been fully filled in, circle those dates.  Put them on your calendar.  Whatever you have to do to remember them, do so.

And each and every week, remind yourself to stay away from short-term trading anywhere near FOMC days.

You can have the most sagacious and locked-down looking trade in the world.  FOMC is everyone’s permission to lose their mind.  Worse yet, traders wait on baited breathe for that dang clock to hit 2:15 pm EST.  If I could take a ball-pin hammer to the entity that is “2:15 pm EST”, I would. I pity the fools that try to play in the 1 minute space.  That takes a special sort of crazy.  

FOMC days.

Or as I like to call it …

The Red Hour …

I despise FOMC days.

I’ll probably be hit with two very small losses on USD/JPY and AUD/CAD (but I’m not out yet and with the swing you get on FOMC day’s, who knows right?).  But it’s not that.  It’s really not.  Both trades would be tiny losses, and I’m still way up for the year with minimal draw-down.   Losses are a part of this business.

Everyone but the volatility players hate these massive swings.  Then on the other hand, the market plays with that knowledge in hand, so I can’t image it really benefits them too much.  I wouldn’t know really.  I’m a directional trader, not a volatility trader.  But really what drives me to pull out my hair, is the way we all have to sit around and wait for 2:15 pm EST.

We wait around for five hours, waiting for swings that we know will happen, at a specified time, on something that the market overall has pretty well figured out and knew anyway.

It’s the Federal Reserve for pities sake.  We can’t do this at the close of business on Friday? And God help you if you get in a trade (as the idiot writing this little piece did) and that trade lasts a little longer than you thought it would, and you drift near the Red Hour when the tidal waves of moves begin …   

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