Economic news takes place almost every day at different times.
As Smart Traders, we don’t monitor every piece of news. We typically only pay attention to 2 major events:
- FOMC (Federal Open Market Committee) and
- NFP (Non Farm Payroll)
Both of these news events have different reasons for being volatile.
FOMC deals with interest rates in the US. The lower the interest rates, the better for companies to borrow and grow their businesses, the better for the overall economy.
NFP is announced the first Friday of each month at 8:30AM EST (when the market is closed). It deals with the number of individuals who may be losing their jobs in the US. The US economy is currently fueled 2/3 by the consumer. More individuals losing jobs, less purchasing power, the lower the Earnings on stocks, the lower the stock market goes.
We had an FOMC on Wednesday and for anyone who is not a Smart Trader and not aware of its impact, it can be surprising. Remember that I do hold positions through an FOMC event. If its impact can be adverse to my position why would I hold my trades though such an event? How can I protect myself? Let’s review