🚨I’ll be live at 3:30 p.m. ET with Nate🚨
It’s FOMC day so we’ll discuss the latest and then cover fear’s role in trading, and it’s Build a Trade Wednesday so we’ll see everyone at 3:30 [tap to join us for Closing Playbook]!
The market felt dead Tuesday for a reason. The S&P 500 barely moved, chopping slightly lower on both the high and the low. This is exactly what happens before major catalysts — price stalls, setups get muddy and everyone quietly waits for the real volatility to hit.
When the tape behaves like this, forcing trades is how you burn capital for no reason.
There’s a fundamental principle that becomes especially important on days like this…
Volatility destroys technicals. Under normal market conditions, technical structure gives you a real edge. You identify your setup, define your risk, place your stop where the chart says you’re wrong, and with enough repetitions the edge plays out.
But high-volatility events like today’s FOMC rate decision wipe that edge off the table. Clean structure gets ignored. Perfect alignment means nothing. One burst of volatility can push price far beyond where any chart would reasonably expect it to go.
Here’s a clear example of why this matters…
Velo3D (VELO) has been setting up well — strong move, then a clean pullback to the EMA8 (eight-day exponential moving average), and now a sharp bounce that would normally be a textbook setup for a short-term swing.
Under regular conditions, you would expect continuation based on that structure. Yet none of it matters heading into the FOMC. All that structure can be destroyed instantly, not because the chart was wrong, but because the environment changed.
The Timing Problem Everyone’s Ignoring
The rate decision hits at 2 p.m. ET, followed by the press conference at 2:30, which is often even more volatile because markets can move depending on what’s said.
Until then, the market has almost no incentive to pick a direction. Expecting big moves before the announcement is unrealistic.
And even if you think you know what the Fed will do, and we all believe rate cuts are off the table right now, do not fall for your own macro guesswork. Even accurate predictions are not an edge because they are not repeatable.
Events like this happen infrequently, and you cannot build statistical consistency on that. Without the ability to repeat a thesis enough times to let the probabilities play out, the whole idea of an edge falls apart.
These are smart sounding gambles, not repeatable trades.
This is also why day trading is not the easy workaround some think it is. While day trading avoids overnight risk, the range lately has been tight. The few opportunities that exist require extended holding just to squeeze out modest gains.
On event days, the tape often has less movement, fewer pivots and far more patience required. It’s tradable, but not comfortably so.
Be extra careful with thin data names. Recently listed stocks or thinly traded tickers may look tempting because premiums are rich, but there’s no real structural context.
When a name does not have enough history to establish true support, resistance or trend reliability, you’re stacking uncertainty on top of an already uncertain macro backdrop.
That’s not a strategy — that’s doubling down on unpredictability.
How to Size When You Cannot Avoid the Risk
If you choose to hold anything through the FOMC, you must size it like a gamble — small enough that a complete loss has zero emotional impact. If losing the entire position would upset you, the size is too large for a catalyst event.
Treat it like losing movie money, not trading capital. That mindset keeps you from turning a single news event into a portfolio level setback.
This rule applies even to strong technical setups, even when your conviction feels justified, and even when you believe you have a good read on macro direction. The market does not reward confidence during major announcements — it punishes it.
The only exception is pure day trading, since you avoid holding through the announcement altogether, but expect limited opportunity before the event.
Every trade held beyond the announcement is a gamble. Size it accordingly or wait until the volatility clears and your technical edge becomes meaningful again.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Breaking News From The TradingPub!
I recently showed Roger Scott a “mistake” in the options market that gives you and me an insane edge…
He was so spooked, he looked like he had just seen a ghost!
