This past week we’ve seen big and fast moves across many forex currency pairs. This also caused many important daily support and resistance levels to be broken.
Many say that these moves were caused by the FOMC meeting and statement this past week. The FOMC meeting is important and is seen by many market participants as a big news event. Such events / news can be approached in many different ways.
Possible ways to approach big news events:
- Some traders actually trade the event itself.
- Keep on trading as per normal (don’t care about news).
- Still trade, but reduce position size / risk before the event.
- Tighten stops on all open trades before the event, then wait and see.
- Stay out of the market before the event.
- Close all open trades before the event, then wait and see.
How were you prepared?
Not all news can be predicted, but every trading plan should factor in a risk management approach for those that can. And hopefully it starts with having stops in place and risking small.
NZDJPY was one of those pairs that broke an important level this past week. I’m going to wait patiently, let price settle and show me where it wants to go next. Remember, we have no obligation to be involved in the markets everyday. Always take full advantage of that.
On Ideas: Please don’t take this as trading advise. Please do your own due diligence before entering any trade. Also see Disclaimers.
Thanks for reading.
Thanks and Regards,
Trading SOS SOS