Non-Farm Payroll [NFP] Forex Trading Strategy
WHY TRADE NFP (NON FARM PAYROLL) EACH MONTH
The non-farm payrolls report is one of the most-anticipated economic news reports in the forex market. It is published on the first Friday of the month at 8:30 AM Eastern time by the U.S. Bureau of Labor Statistics. The data in this report is an indicator of the employment situation in the US. It measures the change in the number of newly-employed people in the United States (excluding workers in the farming industry) since the previous month, hence the name: Non-Farm Payroll
As one of the most-anticipated economic news events of the month, currency pairs (especially those involving the US dollar) typically see big price movements in the minutes and hours after the data is released. Platinum Traders always look at this as a great opportunity with a sound strategy to take advantage of the volatility.
If you are new to Forex, then 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.
Job creation is an important leading indicator of consumer spending, which in turn accounts for a majority of overall economic activity. Typically, Platinum Traders will aim for 150 pips trading this event, so it certainly gets your month off to a great start when traded correctly.
NFP REPORT LAST MONTH
According to the report released in March, for the month of February, the Non-Farm Employment Change produced better figures than expected, and that didn’t materially change expectations for the Economy. The February report came out at 313K, against a forecast of 205K.
Fundamentals is a big part of trading, and Sentiment is built on market trends. The last NFP report was a strong one, and it helped the overall picture, which is the fact that both the Economy and Labour Market are in good shape. However, the NFP report to-be-released tomorrow will have its numbers affected by the aftermath of the recent trade wars that have been implemented by President Trump and China. The impact of the trade wars and regulations will probably make the use of this report very limited, and there should be no changes to policy or rate hike by the FED for the next quarter.
NFP TRADING STRATEGY
How to Trade the Euro on NFP:
The expected number for April in the NFP report to be released this Friday is 190K. The deviation figure to trade the Non-Farm Payroll is +50/-50.
Let me explain what this means:
The Bear Trade
If the actual number on NFP is above 240K, compared to the estimated 190K, sell the EUR/USD with 25 pips stop loss.
The Bull Trade
If the actual number on NFP is below 140K, compared to the estimated 190K, buy the EUR/USD with 25 pips stop loss.
How to Trade the Yen on NFP:
The expected number is 190k. The deviation figure to trade the Non-Farm Payroll is +50/-50.
The Bull Trade
If the NFP number is above 240K, buy the USD/JPY with 25 pips stop loss.
The Bear Trade
If NFP number is below 140K, sell the USD/JPY with 25 pips stop loss.
QUICK 4 TIPS FOR TRADING NFP
- Always keep the Institutional News Feed open.
- Be careful of being in trades an hour before and after NFP.
- Do not trade USD/CHF on NFP days
- Make sure you have your eyes on the clock. As soon as the news event comes out there will be a spike.
THE PLATINUM WAY
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. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum’s Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Trading Floor.
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