Follow Us

Profile Photo

Price Ladder: High Volatility Event Trading (US CPI)

Volatility Providing Outsized Opportunity (US CPI)

The most recent US CPI release produced a much larger move than usual. Why? CPI is gaining more focus as the Fed moves further into its hiking cycle and the possibility of more than 3 rate hikes this year looms, added to this the volatility in equity markets in the week before, results in markets that become much more sensitive to economic data and news.

Having a clear execution plan is imperative, with this being an inflation number bonds markets are first choice; whilst US bonds would appear the obvious choice the US 5 Year was running into more support than the German Bund so by first selling Bund then 5 Year and taking fast profits in Bund allowed the 5 Year position the necessary time to break support. Furthermore, due to the recent volatility, the S&P 500 futures were more sensitive than usual which provided a third short opportunity as higher inflation implied possibly 4 rates hikes from the Fed in 2018. The order flow on the ladder twice gives opportunities for reversal trades in S&P as the selling crescendos into an exhaustion spike, providing short term scalp trades whilst still running other positions.

The execution of this trade is used as a learning tool in the Macro Event week of the Axia Futures 8-week Intensive Trader ​Training part of which is shown below, focusing particularly on managing multiple positions, scaling out and taking short term opportunities in order to allow other trades to continue their moves.

If you are looking to develop a career as a trader within a professional and successful environment, then the Axia Futures 8-week Intensive Trader ​Training is the most comprehensive in the industry based​ ​upon​ ​skill​ ​development​ ​within​ ​the​ ​proprietary​ ​futures​ ​trading​ ​environment.

© Axia Futures 2023. All rights reserved.