Once again, we come to that time when a question haunts every trader on the first Friday of the month:
How to trade Non-Farm Payroll (NFP) Profitably and what NFP trading Strategy can I use?
In this opportunity, allows us to share with you some information about NFP and how to trade forex news.
Let us demonstrate how Platinum members take advantage of this event every month.
This results in hundreds of pips from a simple strategy named aptly as “The News Trading Strategy”.
What is NFP News Release?
The NFP is released by the US Department of Labour. The report is usually published on the first Friday of every month. The data in the report is an indicator of the employment situation in the US. It measures the change in the number of newly employed people in the US, excluding workers in the farming industry.
A number which is higher than the market forecast is considered Bullish for the US Dollar and lower than the forecast is Bearish.
Non-Farm Payroll Date and Time
Time of the event: September 1st, 2017 13:30 GMT
Why is NFP a trading event?
The release of Non-Farm Payroll report is a trading event that can move the currency pairs such as the Euro (EUR/USD) up to 100 pips in a minute.
If you are new to Forex, you need to understand that the release of the Non-Farm Payroll reports every month is a market moving event. The Progress of the US Economy is measured by 12 major fundamental events and the Non-Farm payroll is a leading indicator that measures the job creation aspect of the economy.
The NFP report provides information about the change in the number of employed people during the previous month, excluding the farming industry. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
Most professional traders are waiting for the event this week. The Dollar has been taking some heavy punishment over the last few weeks and this could be the turning point for it moving forward.
The Dollar has been taking some heavy punishment over the last few weeks and this could be the turning point for it moving forward.
Platinum members look forward to trading the Euro on the 4th buy or sell zone on NFP for stop hunts and trend reversals with 20 pips stop losses.
What happened Previously and how does NFP affect Forex?
According to the report released in August for the month of July, the Non-Farm Employment Change produced better figures than expected to balance the equation again and reaffirming the strong trend on the labour market which had come from a good result for June which reported the creation of 222K jobs later being revised to 231K. The August report came out at 209K against a forecast of 182K.
Fundamentals is a big part of trading and sentiment is built on market trends.
Since we should be at present past full employment in the US Economy, that characterises a robust pace of job growth which should begin to ease. So far, each of the business survey employment indexes did pull back in the month of July, potentially signalling a softer pace of growth in August. Even though not much changed and all should be well above their long-run average levels, therefore, even if growth does slow down, it will still remain very strong. Platinum Trading Analysts expect a 175k gain in August.
Do trade the NFP with caution.
How to trade the Euro on NFP
The expected number for April in the NFP report to be released this Friday is 180K. The deviation figure to trade the NFP is +45/-45.
Let me explain what this means:
The Bear Trade
If the actual number on NFP is above 225K compared to the estimated 180K, sell the EUR/USD with 25 pips stop loss.
The Bull Trade
If the actual number on NFP is below 135K compared to the estimated 180K, buy the EUR/USD with 25 pips stop loss.
How to trade the Yen on NFP
The expected number is 180k. The deviation to trade the Non-Farm Payroll is +45/-45.
The Bull Trade
If the NFP number is above 225K, buy the USD/JPY with 25 pips stop loss.
The Bear Trade
If NFP number is below 135K, sell the USD/JPY with 25 pips stop loss.
Important Note: Always keep an eye on the market news and feeds in order to trade the event with proficiency. For Platinum members, it would as easy as logging on and having the “Institutional News Feed” open.
How to Trade the NFP using the Platinum Trading System:
Always keep the Institutional News feed open.
Make sure you have your eyes on the clock.
As soon as the news event comes out there will be a spike. The objective is simple: Go long or short in the 4th buying or selling zone of the day with 20 pips stop loss. We are looking for 30 pips reversal from this with a 20 pip stop loss.
Regardless of the result of the trade, this will be the only trade on the system for NFP.
Never do revenge trading.
Time for the trade to be taken is between 13:30 and 13:45. The trade is invalid after this time.
You must be there live to take the trade on 4th trading zone.
Points to be noted when trading during NFP days:
Be careful of being in trades an hour before and after NFP.
Trade the 2nd level zones and trade the range prior to 12:00.
Do not trade USD/CHF on NFP days.
To trade the news event, trade 4th buying or selling zones on the actual news event with a 25 pip stop loss and 30 pips take profit.
Trading on NFP days is a VERY high risk and many traders get chopped up trying to call the turn.
Do not worry too much if you take the trade or don’t take the trade, there will be plenty more coming our way.
How to become a profitable NFP Trader?
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time.
Learn how to trade Forex the Institutional Way. We educate our clients to think like Institutional Traders and not like Retail Traders. Trading in the same style is not only more profitable but also far less stressful for the retail trader. We want you to make your trading decisions based on confirmed entry points and be confident with each trade that you make.
Wishing you all the best.
The information you’ll find in this article is for educational purpose only. We make no promise or guarantee of income or earnings. Use your best judgement and perform due diligence before using the information in this article. Your success is still up to you. Nothing in this article is intended to be professional, legal, financial and/or accounting advice. Always seek competent advice from professionals in these matters. If you break the city or other local laws, we will not be held liable for any damages you incur.