Best way to trade Bernanke speech is with no fixed position

Honestly I feel that it could go either way after the prepared speech is released at 08:30 am NY time and the grilling in front of Congress begins 90 minutes after that. My tendency is to be bearish on the USD but I feel that I am in a significant minority. It’s unlikely that Mr Bernanke will come out with any major surprises so the best way to trade it is to have no (or very small) positions and use volatile swings as trading opportunities.

I still believe that the reaction of EUR/USD after last week’s FOMC is a very telling indicator. If we start to get another such reaction tonight, then it will be time to go “all in” on the bullish EUR/USD trade.

  1. Hi Sean,

    You’re updates are becoming a staple in my trading regime, thanks for the daily insight. It’s a very open ended question but what pair do you think provides the best opportunity for tonights text/speech? You think the Euro? Is a straddle a bad idea considering the potential for whipsaws?

  2. Don’t like the straddle idea Jack. Either EUR/USD or USD/JPY are best to trade in volatile mkts as liquidity is usually decent.
    It’s unlikely that you will get ‘retirement’ rich on these types of trading days but I’ve known plenty to go nearly broke. Don’t think it’s worthwhile trading apart from smalls perhaps just to have an interest.

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