19th June, 2013

FOMC day!

And what an FOMC it was! The interest rate markets have already started factoring a shift in the Fed stance, and volatility was expected. FOMC itself was hawkish, mainly vis a vis the change in UE projections.

+ve:
1. Building up a reasonable buffer in European hours to have a cushion for FOMC.
2. Morning meeting – discussing possible scenarios + trades to watch out for.
Note: Always make note of flies that can taken, since they seem to show decent movement + most importantly, they move in one direction, so you can just hop on the running train.

-ve:
1. Underestimating the volatility and taking long in o/r expecting some retracement. (I cut loss at 7 ticks, reasonable – given the day).
2. Not keeping track of data. This is quite important. It is easy to get muddled in all the price action, but at the same time, it is important to note the data flow to gauge the real strength the move will take. For eg. I never realized till late that the UE projections had been improved; which was really hawkish.
3. Not making enough use of the buffer. No risk , no reward.
4. Should have done more in and outs, at least through spreads.

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