FOMC day: two moves, not one

[Amanhasnoname]

The Federal Reserve statement comes out at 2pm New York time, followed by the press conference thirty minutes later. Many traders treat it as a single event. In practice, it often generates two distinct moves.

The first reaction comes within seconds of the statement. It is quick, thin, and frequently reversed. The second comes during the press conference, when the chair's wording and tone shift expectations. That move can be larger and last longer.

Scalpers who jump into the first move are fighting wide spreads and poor fills. Those who wait for the press conference face a different challenge: the direction can flip several times as sentences are parsed.

One practical approach is staying flat from half an hour before the statement until a few minutes into the press conference, then trading cautiously once direction becomes clearer.

Another is not trading at all that day. Few strategies have an edge on FOMC afternoons, and skipping them costs little.

How is FOMC day handled in your routine, and has the approach changed after a few of them?