How to trade the Fed Interest Rate Decision Event
Countdown to the 15th of March 2017 begins!
The U.S. Fed Interest Rate Decision. This is when the Federal Open Market Committee (FOMC) members will set the Interest Rate. Federal Reserve Chairwoman Janet Yellen is expected to increase the rates due to the consistency in job numbers, consumer confidence, and sentiment. Will the FOMC follow through on the suggested interest rate hike?
The U.S. Fed Interest Rate Decision ended its zero-rate interest policy (ZIRP) in 2015 and had only one more interest rate hike in 2016. During the whole year of 2016, we had various comments from the Fed about 2 to 3 rate hikes but neither of them happened. However, for the last six months, the data coming out of the US economic reports have been above par.
It will be a fed interest rate decision fundamental event watched closely by all traders. Interest Rate higher than the expected rate would be considered Bullish for the US Dollar whereas lower than the expected rate would be Bearish for the USD.
Platinum Analysts believe that the event will pretty much initiate the Dollar Bull Run as anticipated.
HOW TO TRADE THE U.S. RESERVE FED INTEREST RATE DECISION
While we are awaiting this event, many traders are getting stuck in choppy markets. For those who are new to trading, it is a directionless market. If you are taking positions in the markets without a proper trading plan then expect to rely upon the concept of ‘Luck Momentum’. This is when you have the ‘I think’ syndrome. If you are trading in this manner, I would strongly advise to stop and learn how to trade the fed Interest Rate Decision using proper planning and strategy.
Map your charts to perfection and ensure that you wait for your entries.
At Platinum, we call it the “TRAP RANGE TRADING“.
Every chart should have the following mapped:
- Trend lines
- Support and Resistance
- Chart Patterns
- Supply and Demand Levels
- Fibonacci Levels
If this is new or confusing to you, please do not hesitate to get in touch with one of our professional traders/mentors and we can guide you on how to trade this event with finesse.
Plan Your Trades and Trade Your Plan
Markets go up and markets go down! When you know how to trade them, it makes no difference whether we’re in an economic boom or economic catastrophe.
Always study the fundamentals first for any currency and then move on the technicals to give yourself a true edge to trading currencies with precision.
For example, below charts that show how you can easily trade in choppy markets and gain PIPs. These trade opportunities along with detailed technical analysis were provided to our clients during the daily Platinum Trading Television Webinars and in the Important Trading Zones section on the Platinum Live Trading Floor.
EUR/USD trade
The trade has been doing fantastically well yielding 275 PIPs and it still going. It has been one of the best performing longer-term trades for Platinum clients till date this year.
We favoured short positions at the 50% Fib level @ 1.0825 and took advantage of the Inverse Head and Shoulders pattern formation from 1.0500 area. Various major supply and demand areas to place alerts were also highlighted on the chart.
AUD/USD trade
The Aussie rejected a major resistance/supply area. The long-term view is Bullish on the Dollar.
- Short the AUD/USD @ .7730 or the nearest zone with 40 pips stop loss and a target of .7510
- Short the AUD/USD on a daily close below 0.7646 or the nearest zone with pips stop loss and a target of .7510
- Place alerts on the major and minor support areas and go for 20/20 trades.
USD/CAD trade
As per the chart, the CAD is on Descending Triangle. Two ways to play. Supply and demand areas to place alerts on have been highlighted on the chart.
- Long the USD/CAD @ 1.3000 or the nearest zone with 40 pips stop loss and a target of 1.3210
- Short the USD/CAD @1.3000 on a daily close or the nearest zone with 40 PIPs stop loss and a target of 1.2825
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = A Perfect Trade
At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time.
The secret weapon of a successful trader is an educated, disciplined and emotionless mindset which is crucial to long-term profitability and consistency.
We arm our clients with:
- Knowledge and understanding of various asset classes.
- The Institutional approach and key Trading Strategies.
- State of the art Trading Platform.
- Fundamental fx news events and understanding of how fundamentals affect markets, what makes markets move, important releases, and central bank monetary policies.
- Daily and Weekly trading round-ups.
- Key bank trading levels.
- Live Trading Bulletins and Webinars.
- Technical analysis techniques to determine market moves before they happen.
- Guidance and tools to master emotions.
- Money Management & Risk Management techniques.
Subscribe to Platinum’s Forex Newsletter to get detailed information on:
- Trading the European Elections.
- How to Trade the Gold Run.
- Trading the Canadian Recession and a 3000 PIP move.
- 1000+ PIPs move on the USD/JPY.
- 500 PIP move on the Euro parity hit.
Meanwhile, please download a free ebook and read about how to trade different currencies through different months of the year as well as the various trade patterns.
Have a beautiful day and an even wonderful week!
Nisha Patel
Live from the Platinum Trading Floor.
Connect with me on LinkedIn.