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This is How You Trade Around Events

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In the latest episode of The Trade, Performance Coach Dan Hodgman talks about one of our funded trader's trades last Wednesday, March 7. The trade occurred right after the ADP Employment Report, a report that showed 235,000 jobs were created in February — more than the 200,000 jobs expected. 

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One might expect a better-than-expected jobs report to cause a sell off in the Ultra Bond (UBM8) since the market might anticipate that the Federal Reserve will raise interest rates more this year. However, bond prices failed to sell off.  That could have been the spark that funded trader Craig S needed to initiate a long.

Some parts of this trade were good, while others may be more questionable. Here's Coach Dan's take on how to trade an event after it happens.

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In the YouTube below, Coach Dan provides a number of recommendations for trading post event. Here's a recap:

  • Don't trade for at least 5 minutes;
  • Take a shorter-term view of your stop. Instead of putting a stop at a longer-term support range, place a stop somewhere closer, like below the prior 15-minute bar's close; 
  • Pay attention to important technical levels, like settlement and the prior day's Point of Control (the price at which the most volume traded); and
  • Don't scale into a trade just because you are up money. Make sure that the price you enter a trade is justifiable. 


Posted by TopstepTrader on March 12, 2018
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