ETF Arb trade strategy for today 2PM Fed announcement

[KCalhoun]

Here's a strategy I'll test today right after Powell's 2pm announcement.

Assumption is that fed rate information will move the market up or down, we just don't know which direction, so I'm hedging.

The strategy: put buy stop orders in for both long bias TQQQ and short bias SQQQ at .50 or so above market, right before 2pm.

Similar opposing pairs are TNA/TZA TVIX/SVXY etc,, I'll trade whichever has strongest chart pattern.

Whichever triggers first is the starting trade. I'm using OTO conditional orders with trailing stops as usual.

Note there's usually a whipsaw reaction right after the announcement, followed by trending tradable setup. Goal is to profit from major move if one occurs.

Would like any comments or ideas... tia

 

[Genevian Speculator]

I predict both orders will trigger, living you with the spread as a loss. Did this in FX too.

 

[narafa]

There are advance GDP numbers coming out at 8:30 AM.

 

[traider]

Wow what name is this strategy called?
It's not really an arb

 

[d08]

It whipsaws, on top of that you'll encounter massive slippage.

 

[RedDuke]

I mean what else can they throw??? Forget about using bazooka weapons, they already went all nuclear, what else can they announce apart from buying equities outright? Unlikely since market moving up very fast.

 

[Girija]

Here's a strategy I'll test today right after Powell's 2pm announcement.

Assumption is that fed rate information will move the market up or down, we just don't know which direction, so I'm hedging.

The strategy: put buy stop orders in for both long bias TQQQ and short bias SQQQ at .50 or so above market, right before 2pm.

Similar opposing pairs are TNA/TZA TVIX/SVXY etc,, I'll trade whichever has strongest chart pattern.

Whichever triggers first is the starting trade. I'm using OTO conditional orders with trailing stops as usual.

Note there's usually a whipsaw reaction right after the announcement, followed by trending tradable setup. Goal is to profit from major move if one occurs.

Would like any comments or ideas... tia

TVIX and SVXY are only for Calhoun look spikes and not for faint hearted. I will stick with TQQQ and Spy.

 

[KCalhoun]

I predict both orders will trigger, living you with the spread as a loss. Did this in FX too.

Good point, I'm thinking that a fix is wider trailing stops initially, then tighten up after initial shake... any other ideas?

Btw wow CCL RCL DAL today

 

[KCalhoun]

TVIX and SVXY are only for Calhoun look spikes and not for faint hearted. I will stick with TQQQ and Spy.

Other pairs SPXL/SQQQ TNA/TZA, need to find one to trade vs SDOW

 

[tango29]

Have you thought of a trade before the announcement? On days like this with a big move in one direction I like to try for a move opposite in the last half hour before release time. I assume it is people closing positions going into the announcement. If it happens early I pass, but I have had a fair success ratio with the idea. I don't usually hit it right the first trade, but I keep a tight stop and will try 2 more reentries before I quit fighting the trend. I also like to have locked up profit for the day before being the top or bottom picker.