Non-Farm Payroll, Trade with Confidence and Consistency
Hello Traders,
There is a question every trader asks themselves on the first Friday of every month:
How can I trade Non-Farm Payroll (NFP) with confidence and consistency?
Today, I would like to share with you some information about NFP and how to trade the upcoming event. Allow me to demonstrate how Platinum members take advantage of this event every month resulting in hundreds of pips
from a simple nfp trading strategy named aptly as “The News Trading strategy”.
What is Non-Farm Payroll?
The NFP is released by the US Department of Labour. The report is usually published on the first Friday 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: May 5th, 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 report 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 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 in the 4th buy or sell zone on NFP for stop hunts and trend reversals with 20 pip stop losses.
What happened Previously?
According to the report released in March for the month of February, the Non-Farm Employment Change jumped to 235K, edging above the estimate of 196K. For the March report that was released in April, the number fell sharply to 98K while it was estimated at 174K as a result of the extremely bad weather which hit the United States in that month.
Market sentiments
Fundamentals are a big part of trading and sentiment is built on market trends.
In April, the NFP came out at 98k against an expected 174k which was disappointing for markets but somehow expected due to the weather conditions which affected the creations of jobs in the economy.
This month Platinum Analysts expect that with the short-term change in sentiment in the markets and the uncertainty about Trump’s new tax policy, the NFP will underperform the forecasts of the markets of 194k.
This report will confirm to us if the economy is still performing at the same pace and prove that last month’s bad numbers were a one off or set the pace for a possible retracement and cool-down of the US economy in the short term. Do trade with caution.
How to trade the Euro on NFP
The expected number for April in the NFP report to be released this Friday is 194K. 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 239K compared to the estimated 194K, sell the EUR/USD with 25 pips stop loss.
The Bull trade
If the actual number on NFP is below 149K compared to the estimated 194K, buy the EUR/USD with 25 pips stop loss.
How to trade the Yen on NFP
The expected number is 194k. The deviation to trade the Non-Farm Payroll is +45/-45.
The Bull Trade
If the NFP number is above 239K, buy the USD/JPY with 25 pips stop loss.
The Bear Trade
If NFP number is below 149K, sell the USD/JPY with 25 pips stop loss.
Important Note: Always keep an eye on the fx 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.
The Platinum News NFP Trading Strategy
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 trading zone 4.
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 20 pip stop loss and 20 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.
The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
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.
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Wishing you all the best.
Nisha Patel
Live from the Platinum Trading Floor.