Trades on Fed Day
Here I’ll share with you how I traded the FED announcement on Wednesday, November 2nd, 2022, and made a profit. Trading on the FED day can be tricky, but with the right strategy and discipline, it can be a profitable opportunity. In this video, I’m going to take you through my trades and show you my step-by-step process.
I didn’t trade the morning session and only traded the FED announcement of the rate hike and the comments afterwards. Typically I’ll only trade for the first hour or 90 minutes at best. On these days I wait until the most volatile part of the trading day.
Only two trades were executed, one on the SPY and two trades on the Qs.
Out of the gate the first trade was on the SPY, and I took a quick short position right after the announcement came out at 2 o’clock. I saw that the SPY was having trouble getting any higher than the quick move higher, so I took the 383 put and got filled at 115. I held it for three minutes, and it worked up against me a little bit, but I was patient to hold it. I got out at 2:10, and 52 seconds. At this point of the day, I was up about $25 or so after commissions.
The next trade I took was on the Qs to the short side since everything was starting to fade. I thought maybe it would break down here as it approached the previous day’s close. It found some support at 275.11 and I held it a little bit too long. I got out of this trade at a pretty big loss. I was down about seven bucks at this point of the day.
I was a little bit more patient to see what the market would do once Jerome Powell started talking, and I started to see a slight M pattern form on the Qs. So, I took the second trade on the Qs about 14 minutes later. I bought one contract, and this first one was just a feeler. As soon as it started to make a move, I bought three more contracts. I sold all four of them 20 seconds later at 2:36 and 50 seconds for 112 each.
Trading anything on the FED day is really tricky. You have to be quick on your feet and get in and out, especially when the FED chair is speaking. The market can react on a dime on any comment. With my approach, I was able to go from green to red, back to green, and be up on the day $92.10 after commissions.
Three key takeaways from this video are:
- Trading on the FED day can be profitable with the right approach.
- Being patient and waiting for the right moment to make a trade is important.
- Quick decision-making and getting in and out of trades is crucial.
About me: I’ve been actively trading and studying the market since 2005. My channel is dedicated to sharing my trading experiences and helping others learn about trading in the stock market.
Resources mentioned in this video:
SPY (SPDR S&P 500 ETF Trust): An exchange-traded fund that tracks the S&P 500 index.
Qs (Invesco QQQ Trust): An exchange-traded fund that tracks the Nasdaq 100 index.
My best advice for trading on the FED day is to be patient and wait for the right moment to make a trade. Don’t jump in too quickly, and don’t be afraid to get out of a trade if it’s not going your way.
FAQ:
Why is it important to be patient when trading? It’s important to be patient when trading to allow trades to work in your favor. This can help you make a profit on the trade.
Why is it important to react quickly when trading on Fed day? It’s important to react quickly when trading on Fed day because the market can be highly volatile and can change direction quickly. Being quick on your feet can help you get in and out of trades before the market changes direction.
Check out the other trade recaps here.
Here’s the previous day’s trades.
Always remember trading of any type is risky. It can result in part of all of your money invested. Only trade with money you can afford to lose and only after you have done your own due diligence. Never blindly follow the advise of anyone without first conducting your own research.
