Notes
- Michael emphasizes that Federal Reserve events, like Powell’s testimony, can create volatility and unpredictability in the market. He warns against speculation during these periods, as it carries high risks and low probabilities of success.
- He states that trading during such events is like gambling, and no one, including himself, can predict market movements with certainty. He suggests waiting for the markets to settle after the testimony before making any trading decisions.
- Even experienced traders are uncomfortable during Fed events due to possible manual interventions in the market. We should know that even if we win trades during these events, it is not due to skill but luck.
- Michael also stresses the importance of learning to observe market behavior without trading, especially during uncertain times like Fed testimonies or non-farm payroll reports. Observing the price action during these events is crucial to understanding market reactions.
- The price tends to go from one NWOG to another.
DXY Risk-On And Risk-Off Scenario
Standard Deviation And NWOGs
ES Trade Example
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