Open Code Easylanguage Strategy for E-mini Nasdaq FOMC NightTrader

In this video we reveal an open code trading system to trade FOMC days for Tradestation. It uses the DontTradeOnFOMC function that we also preview in the video. The entire list of FOMC dates and functions can be downloaded from our Tradestation Training and Members FAQ. This function can be used to backtest any FOMC based strategy, to trade or not trade on FOMC Day.

One pattern we have noticed is how stealth bull markets melt up at night and then chop around during the day session. Monday evening, I received a text from Tradestation about a suspension of day trade margins for November 5, 6, 7. The leverage we use in our portfolio trading does not require day trade margins. We had anticipated potential volatility and how the markets would react to multi-day uncertainty in addition to FOMC on Thursday.

Two things happened post-election: 1.) Certainty on the election outcome was very soon relative to some recent elections (contrary to our beliefs) 2.) When day trade margins are not present, markets have the tendency to trend. We see this at night but now we have also seen that the last couple of days. When highly leveraged traders are trying to capture the trend with positions in futures or 0DTE options using day trade margin, during low volatility, the markets chop and don't trade through the strike. Often times, the trends are revealed at the very end of the day when day trade margins expire. Market making against leveraged positions seems to cause contraction in day trade trends in lower VIX environments. When there is less leverage, the markets trend. Having an indicator to see the percentage of contracts using day trade margin would be interesting.

In our portfolio trading we mainly focus on day trade strategies but since last November we have seen this "sneak it higher stealth bull market" more and more frequently.

We use these concepts to test a new FOMC Trader setup that goes long after midnight on FOMC Day, based on EST midnight, using a 12 bar breakout (60 minutes based on 5 minute bars). It uses a $2000 stop loss per E-mini or exits at the close. The open code is in the video and requires the DontTradeOnFOMC function in our Tradestation Training and Members FAQ.

Based on the melt up price action we see at night and the FOMC patterns we have seen since November of last year, we anticipate that this pattern could persist, especially if day trade margins remain suspended. Getting in early (at midnight) can provide enough cushion for the volatility around the FOMC statement if the market has moved far enough away from the entry point. Having enough "cushion" to stay in the position based on volatility during the statement is key to capturing these types of trends.

Past performance is not indicative of future results.