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A Trader’s Playbook
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Hello, my Friends!
✂️ This past trading week was anything but ordinary: a surprise mid-week banking holiday, FOMC meeting held rates but tweaked its dot-plot, and fresh Middle-East flashpoints kept headline algos on alert.
🔄 Through it all, volatility barely flinched - a reminder that markets are forward-looking machines, not referees in global politics.
🎯 Instead of guessing winners and losers, our edge comes from watching how price, spreads, and volatility regimes digest every headline.
The muted response to war news hints traders expect a diplomatic off-ramp - at least for now…
⚡ Headlines That Moved the Needle
Iran–Israel Back-Channel? Western diplomats say Tehran may pause strikes while leadership “reassesses.”
Tokyo Walks Away: Japan cancels a key U.S. meeting after Washington pushes for steeper defense outlays.
Chip-Plant Chess: The U.S. signals curbs on allied fabs operating in China - another supply-chain wildcard.
Fed’s Daly: “I’m looking more to the fall - not July - for a possible rate cut.”
💡 Conventional wisdom says summer is slow. This year? Strap in - there’s plenty of unfinished business.
All week, Fed officials nodded toward keeping the policy rate elevated into 2025 - even as swap markets beg for earlier cuts. That tension sets the stage for today’s deep dive.
Ready to thrive while the Fed holds the high ground? Let’s get into a traders playbook when the Fed stays stubborn, but Futures beg for mercy.
Lessons From The Trenches
For the seventh straight meeting, the Fed froze its policy rate. The new dot-plot now sketches just two quarter-point cuts - both relegated to late 2025.
Market wish-list: Interest-rate swaps are still pricing the first ease as early as October 2025, and some option desks are hedging for an even faster pivot.
Result: Every data print or Fed sound bite sparks rotation from growth to value. Day traders get caught between fake-outs at the open and directionless grinds by lunch.
A 3-Step “Higher-for-Longer” Game Plan
Step | What to Do | Why It Saves Your P&L |
|---|---|---|
1. Rate-Radar Ritual 📅 | Block off all Fed speeches, CPI/PPI, and Treasury auctions on your platform calendar. Flatten or cut size 30 min before each event; reopen risk only after the 5-minute candle closes outside its initial range. | Removes “gotcha” wicks that trigger stops and forces you to wait for confirmed direction. |
2. Yield-Proxy Pairs 🎯 | Track a live grid: TLT, XLF, QQQ, IWM. When 10-yr yields spike > 3 bps in 10 min, look for: | Lets you monetize rate shocks indirectly instead of guessing the move. |
3. Vol-Scaled Position Size 📐 | VIX < 14 ➡️ 100 % clip size | Converts macro uncertainty into a pre-coded throttle, keeping drawdowns shallow while still letting you trade. |
Write on a sticky note: “My cash earns 5 %; every trade must beat that.” Refocusing on opportunity cost will stop you chasing the first green candle after Fed headlines.
Quick Checklist Before Monday’s Bell
Update your economic-event calendar
Pre-mark TLT / XLF / QQQ levels you’ll act on if the 10-yr jumps 3 bps.
Set VIX-based size rules in your trading journal.
Use this blueprint in the next Daily Impulse and let’s swap fear for predictable income - and stay miles ahead of the herd.
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Steve B
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