Considering that I nearly always sit these kind of risk events out, on occasion I WILL deploy strategies in order to take advantage of the expected near term volatility.
In this case I’ve got a long USD bias regardless of the announcement with a few smaller orders already in play including plays short GBP/USD as well long USD/CHF, but am also “waiting in the wings” with several other pairs – locked and loaded.
What I like to do in situations like this is place several smaller orders “above or below” a given pairs current price “prior to the announcement in line with my bias so…..with GBP/USD for example, and order 20 pips under the current price , as well 30 pips , as well 50 pips!
All said and done “if” the market moves in my direction I’m in “deep” on the momentum.
If not….fine. I watch the action rocket in the opposite direction with little or no skin in the game at all.
Take it or leave it – this strategy really works well on short-term “momentum plays”.
Lets see how it plays out and envision these “traps” set in 10 additional pairs.