Central bank decisions: do you trade them or sit out?

Rate decisions can move a currency more in a minute than in the rest of the day, and spreads often widen sharply just before the announcement. Traders handle that very differently.

Which camp are you in?

• Flat before the release, and only trading once the dust settles
• Holding existing positions, with stops adjusted for the event
• Trading the reaction, in the first minutes or once the press conference starts

Explain the reasoning behind your approach, and what a bad experience taught you if you've had one. A decision can be fully expected and still move the market, because traders react to the statement, the vote split and the projections as well as the rate. The mechanics are covered in how interest rate decisions move currencies.