Fed Leaves Rates Unchanged - But Not My Charts

So the Fed Open Market Committee just announced they're leaving the federal funds rate unchanged at 5.25%. Here's what my charts look like for the past couple hours - volatility, anyone? Interestly, aside from those crazy whipsaws up and down, the price has returned to a point not terribly far from where it was before the announcement. This is a case where trading on the Fed news could've left you with painful losses as the whipsaws triggered your stops.

Let's say you'd been brave enough to trade on this news and had set both short and long limit orders with tight stop losses, say 15 or 20 pips in each direction. Unless you were wise enough to take profits fairly quickly and contented yourself with modest gains, those upward and downward spikes could've earned you losses on both the long and short trades as the market swung back and forth, setting off both of your limit buy and sell orders but never resolving into a clear trend that would actually make you money.

This is one of the reasons I'm very leery of trading the news these days. For the record, I've been short the EUR/USD since the weekend for technical reasons: on the daily charts, the price moved inside the upper Bollinger Band on Sunday, and that's what I've been trading on since then. After all this Fed fuss I'm still showing a 36 pip profit on that trade, and I'm glad I've got my stops set way up over 1.29, otherwise this could've been an ugly day. Now I'm hoping that original downtrend will continue when all the dust settles from this Fed announcement.

Related topics:

The Bernanke Bounce: Markets Rally on Fed Chairman's Inflation Comments

In case you're wondering why the currency markets went crazy today...the Fed raised rates

Fed Chairman Ben Bernanke's Speech at the International Monetary Conference

Fed Chairman Ben Bernanke on Energy Prices and the US Economy