Traders tend to believe that as traders, they must trade. That’s how we make our living of course. But professionals know when to respect obstacles that can get in their way; or in trader talk: reduce trade edge. Trading on Fed Reserve testimony days or similar such as Beige book, Fed minute releases and the like often creates additional challenges but should not let that prevent you from opening your platform today and tomorrow.
During the actual hearing, consider implementing reversion to mean type strategies. Market profile is a great example where price hovers back in forth around the point of control. Keltner channels, Bollinger bands and other mean-based indicators can also be applied. Of course no method is full proof and a plan without risk management will surely result in a bad outcome, especially if Uncle Ben answers a question that moves the market. As the testimony is wrapping up as well as after the beige book release, look for trend based trades that you can trail and hopefully get that home run.
As with any news release; anything can happen. Keep your risk management plan in place and consider lightening up on size given the prominence of such an event.