FOMC Risk Management: Why You Must Reduce Size Before the Meeting

Every FOMC meeting is a binary event with asymmetric risk potential. Here's a risk framework that protects your account while letting you participate: **Rule 1: Reduce all USD-sensitive positions to 50% before 1:45 PM EST on FOMC day.** This applies to: EUR/USD, GBP/USD, USD/JPY, USD/CHF, gold, indices — essentially everything. **Rule 2: Never use market orders during the announcement window.** Spreads can widen 5–20× during the release. Set hard stops but accept they may not fill at the exact price. **Rule 3: Define your "accept this outcome" plan before the meeting.** What if USD rallies 100 pips? What if it drops 150 pips? Have a clear plan for both scenarios — so you're executing a plan, not making emotional decisions. **Rule 4: If you don't have a view, there's no trade.** FOMC without a thesis is gambling. Either you've studied the setup and have conviction, or you sit out. What does your FOMC day position management look like?