Today, we would like to share with you some information about NFP and how to trade the upcoming event. Let us demonstrate how Platinum members take advantage of this event every month resulting in hundreds of pips from a simple 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 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: June 2nd, 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 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 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 April for the month of March, the Non-Farm Employment Change fell sharply and unexpectedly registered a mere 98k against a forecast of 174K, edging way below the market expectancy. That figure was later corrected to 79K which just added pressure on the US Dollar. For the April report that was released in May, the number of jobs created edged higher at 211K while it was estimated at 194K. However, the market had none of it and the day closed lower for the US Dollar and results of that figure were only seen at the beginning of the following week.
Fundamentals is a big part of trading and sentiment is built on market trends.
In May, the NFP came out at 211k against a forecast of 194k which was good news after a so disappointing previous month for the March report. That maintained the trend in the current US market which is showing a lot of resilience with the NFP presenting strong figures month after month for the past few releases.
This month Platinum Analysts believe that the near-term change in sentiment in the nfp markets and the uncertainty about Trump’s administration delivering on his promises, may well affect the market to some extent, but they expect the NFP will most likely present a solid figure and may even outperform the forecasts of the markets of 186k.
The weekly jobless claims have been performing well and unemployment has continued to fall with the unemployment rate falling from 4.8% to 4.4% from January to April of this year.
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 186K. The deviation figure to trade the NFP is +35/-35.
Let me explain what this means:
The Bear Trade
If the actual number on NFP is above 221K compared to the estimated 186K, sell the EUR/USD with 25 pips stop loss.
The Bull trade
If the actual number on NFP is below 151K compared to the estimated 186K, buy the EUR/USD with 25 pips stop loss.
How to trade the Yen on NFP
The expected number is 186k. The deviation to trade the Non-Farm Payroll is +35/-35.
The Bull Trade
If the NFP number is above 221K, buy the USD/JPY with 25 pips stop loss.
The Bear Trade
If NFP number is below 151K, 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 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 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.
The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
The Platinum Way
At Platinum Trading Academy, United Kingdom, 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.
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Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day!
Live from the Platinum Trading Floor.