What is Non Farm Payroll?
The non farm payroll (NFP) is released by the US Department of Labor. 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: February 3, 2017 13:30 GMT
Why is Non Farm Payroll (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 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 facet of the economy. The Non Farm Payroll 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 traders are waiting for the event this week. The Dollar has been taking some punishment over the last one week 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 and for stop hunts and trend reversals with 20 pip stop losses.
What happened Previously?
Per the report released in December for the month of November, the Non-Farm Employment Change jumped to 178K, edging above the estimate of 177K. For the December report that was released in January, the number dropped to 156K while it was estimated at 175K.
Fundamentals is a big part of trading and sentiment is built on market trends.
In December, the Non Farm Payroll came out at 156k against an expected 170k which was pretty disappointing for markets.
This month Platinum Analysts expect that with the robust markets and soaring investment sentiment, the NFP will beat the forecasts of the markets of 170k.
The major difference between the last Non Farm Payroll and the one that will be released this Friday is Trump’s simultaneous passing of executive orders. During the previous month, we also saw a sharp gain in the average wages and we expect to see a continuation.
This will be the first report of the year 2017, so trade with caution.
How to trade the Euro on Non Farm Payroll (NFP)
The expected number for January in the NFP report to be released this Friday is 170K. The deviation figure to trade the NFP is +30/-30.
Let me explain what this means:
The Bear trade
If the actual number on NFP is above 200K compared to the estimated 170K, 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 170K, buy the EUR/USD with 25 pips stop loss.
How to trade the Yen on NFP
The expected number is 170 k. The deviation to trade the Non Farm Payroll is +30/-30.
The Bull Trade
If the NFP number is above 200K, 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.
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.
The Platinum News Trading Strategy
How to Trade the Non Farm Payroll (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 pip 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 12:30 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 non farm payroll 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 secret weapon of a successful trader is an educated, disciplined and emotionless mindset which is crucial to long-term profitability and consistency.
If you have any questions about trading this event, please schedule a free consultation with one of our traders/mentors and we shall guide you step by step on trading the opportunity.
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