Trading Interest Rate decisions

So the US interest rate was kept the same today. I think it was expected by most. Longer for higher. And maybe even more tightening. And higher interest rates usually make the dollar index go up.

It’s been 17 minutes since the news. So why is it going down right now immediately after the announcement? Just news day release noise? Were traders expected cuts or something?

Sometimes a price fall after good news is interpreted as showing the opportunity to make a profit from this event is now over. If the majority of market participants were expecting this good news, they may well have added long positions in the run-up to the announcement and pushed prices higher as the date approached. Once the announcement confirms the good news, that opportunity has already been taken, the announcement simply confirms its termination, so they start to withdraw capital for redeployment to other opportunities. This causes prices to fall.

Or that’s the theory anyway.


Hey @samewise although it went down temporarily I wouldn’t say that’s the overall direction. Some use the news to scalp because usually that’s when liquidity enters the markets. For other longer term traders it’ll help gauge where the market “might” go.

In my experience the news action is psychology (fear & greed) and could be tactics used to create liquidity.

I’m thinking this is it. I’m probably watching it too closely and should probably stay away completely that close or if I do trade, keep it small.

What type of trader are you?

Little bit of it all, scalper, day trading and swing I guess. I don’t trade in a single bucket style I guess.

@tommor Spot on… I trade many of the Global Bank stocks this way…

Buy on the (Rumour) Sentiment… Sell on the News…

You can also trade the eight major currencies using this method with upcoming Inflation and Employment data news releases…

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Definitely don’t want to knock what you do, so if it’s working keep doing it.

If it’s not, I would suggest sticking to one style and mastering it. It’s a lot easier to understand scalping once you understand swing and longer term trading styles. I don’t scalp; it doesn’t fit my psyche. Plus trading, for me, is a means to not have to work harder but smarter. Less is more.

Scalping is really too stressful for me. And now that I actually looked at my trading stats for the last 6 months, I’m holding trades on average 21h (using myfxbook - really cool tool).

So there you go. Not a scalper!

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Nice! A day trader. Again not knocking what you do just planting a seed of reevaluation.

On average for me, I hold trades anywhere from 1-3 weeks. Initially trying to day trade and scalp was a headache for me and very stressful.

Keep rocking!

I’m feeling this lately. Definitely looking at my options.