The US Federal reserve is meeting soon. Guy said not to trade during this time. I just wanted to know why and what the problems could be of doing so?
Trading flags and consolidations is a technical trading method.
We don’t want a major news event to destabilise our method, so the safest thing to do is to sit tight while big announcements, such as Earnings reports and Federal Reserve statements are being made.
So for example, if a company has their earnings report next week, it may be an idea to trade other stocks in the meantime, and be wary of the earnings season in general, as one piece of news can completely rock the market and destroy even the neatest flags.
At the same time these news events can catapult stocks favourably for us in context of flags, but it’s a bit of a gamble, so the safest option is to be cautious around that time.
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If the entry price of the flag or consolidation is hit, but then the market just starts moving sideways not hitting either entry or stop loss. Is there a point where I can say this is not the typical flag trader trade and just exit?
Yes, it's typically where it stops being a flag or consolidation, becomes range bound, and other opportunities look better. Also, watch to see if the OVI remains in the direction of the dominant trend, and the presence of Big Money Footprints, ...
Is it normal enough that after a trade is filled that it comes back into the flag (bull) and bounces along like that for quite a few days before it thinks about going back up through the original buy stop order level again?
This is something that can happen. Ideally when the stock breaks out it keeps going, takes out our first profit target and then some more on top. When the markets are breaking out big time either way, then that's how we make our best windfall ...
What does the OVI do?
Simply put, the OVI measures the flow of the big, smart money in the markets. It does this by monitoring the activity between buyers and sellers of options. You do not need to know anything about options trading to use the OVI. But by looking at ...
The trades I have put on have not worked, I’ve made some losses, what am I doing wrong?
The only way you can lose money with these methods (if applied correctly) is on a false breakout. In other words, you get triggered into a trade, and then it retraces and stops you out before P1. This scenario is highly unlikely if: A) The flag or ...
If the length of the flag starts to approach or exceed the length of the pole then its probably time to consider moving on?
We typically like the flag to be a consolidation where the bars are tighter than what has gone on before. This description would seem to refer to a range bound stock forming a channel.