How to Trade GOLD FOMC Meeting. Best FED Rate Decision Trading Strategy Explained XAUUSD

FED Rate Decision is one of the BIGGEST market-moving events—and Gold always reacts violently!

Today, I will teach you how to trade FED Rate Decision and FOMC on Gold XAUUSD.

You will learn a simple strategy to trade Gold before and after a rate decision announcement.

I will share with you important insights about Gold price behavior and a lot of useful trading tips for beginners.

THE CALENDAR

To trade FED Rate decision on Gold, you should always know the exact date and time of each event.

You can find coming Fed rate decision in the economic calendar.

I use the one on investing . com website.

You can find the exact time of this event and check all scheduled rate decisions for a year.

GOLD BEHAVIOR AHEAD OF RATE DECISION

Important thing about Gold price behavior ahead of a rate decision, is that typically the market slows down.

It happens because institutional and retail traders tend to wait for FED announcement.

Because of that, market volatility drops.

Look how Gold was acting ahead of one of the FED Rate Decisions on 1H time frame.

The market started to trade in sideways 2 days before a rate announcement.

Regularly, such consolidations will occur within parallel channels with solid intraday resistance and support.

GOLD DAY TRADING STRATEGY AHEAD OF FED RATE DECISION

The first strategy, that you can use to benefit from a coming FED meeting is to trade that consolidation.

You can simply:

• buy the market from a support of the channel,

• set stop loss below that,

• aim at a resistance of the range as a target.

Sell gold when it tests a resistance of the range:

• stop loss is above that,

• take profit is based on the support of the range.

Look, how easily you could catch a winning streak of at least 4 trades on Gold, following that approach.

2 HOURS AHEAD

2 hours ahead of a Fed Rate decision, stop trading.

If you have a running trade, move stop loss to entry and don't open any trade before an interest rate announcement.

During such a period, Smart Money will manipulate the market, making it provide a lot of false signals. They will try to make you a wrong decision, stopping you out from the trade and grabbing your liquidity.

AFTER FED RATE DECISION

After a FED rate decision declaration, I recommend waiting for a 4H candle close. It will price in the market reaction to that and show you where the market will go next.

STRONG SIGNAL

Your strong confirmation signal that you can rely on is a breakout of a support or resistance of the channel.

Its support violation and a 4H candle close below will provide a strong signal to sell Gold.

While a bullish violation of a resistance, will be an accurate signal to buy.

Look how a bearish violation of a support of the range on a 4H could help you to predict a selling behavior.

NO REACTION

Alternatively, remember that there will be instances when Gold will not react to FED rate decision at all. This may happen because the FED's actions might align with the expectations of the market participants.

If so, you can continue trading a channel, till the release of the next high impact news.

YOUR STRATEGY

To effectively trade FED rate decision on Gold, never forget to check the economic calendar to always know the exact dates of this event.

Trade a sideways market ahead of the announcement and rely on a breakout as a confirmation signal afterward.