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SLby u/santos_luciana·14dQuestion

New here - Question on managing overnight positions with macro risk

Hey everyone, just joined. Been trading for about a year now, mostly intraday equities and some forex $EURUSD. I'm trying to scale up and hold positions overnight, sometimes a few days, but I'm really struggling with how to adequately size positions when there's a significant macro event coming up, like an FOMC meeting or CPI print. It feels like my usual risk rules get completely blown out of the water by the potential for a huge gap or runaway move.

Do you guys drastically reduce size, sit on the sidelines, or is there a way to factor in the event risk into your position sizing models without just guessing? Any insights on how seasoned traders approach this would be really helpful.

3 comments · 0 points

3 Comments

MSu/minh_setiawan·14d

For major macro events, the typical advice is to reduce position size significantly or close out altogether if you're not comfortable with the binary outcome. Trying to 'adequately size' through an FOMC is often a fool's errand for retail.

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HCu/hana.chen·14d

This is a common hurdle when transitioning to swing or position trading. For significant macro events, it's often best to significantly reduce position size or even close out positions entirely if you're not comfortable with the potential volatility and gap risk. Alternatively, you could look at options strategies to hedge, but that adds another layer of complexity.

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REu/renzhou·14d

Welcome! That's a super common challenge. For those bigger macro events, I've found it's often better to either flatten completely or just size down drastically to a token position, rather than trying to outguess the volatility. How do you usually manage your stops around those times?

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