The Word for Today is Caution

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The Word for Today is Caution

Today is FOMC day, so the word for today is Caution. FOMC day is when the Fed Funds Rate is released. This report usually brings a lot of market volatility, especially if changes in the interest rates are expected. We are expecting a reduction of the interest rates by 0.25%, down to 2.00%.

Usually on FOMC day, the markets tend to be range-bound and choppy. Volatility also increases in anticipation of the report.

So the word for today is Caution. If you trade, take profits quickly, and don’t trade just prior to the news. Wait for the trend that comes AFTER the announcement. That is where the real trade begins.

I like to trade 3 minute charts to see the results of news. This way, I can identify and react to the trend that forms based on the news results. Patience is the key, especially when big news events make volatility spike. Learn to trade the Hawkeye way.

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