TradeProofer Team
TradeProofer
Timeline
13:29:00-13:29:44: Business as usual
13:29:44 - 13:30:01: Brokers start to get defensive, spreads double
13:30:01 - 13:30:06: The Rage! Even minimum average spreads go as high as 0.6, or even more. Some brokers simply "step aside" and quote 10+ pips spread.
12:30:06 - 12:30:20: The dust is settling, spreads recover relatively fast to normal levels when compared to earlier NFP events
Click here to see the previous month spread behaviour.
Why is this information useful?
One thing you will need to know when preparing to trade the Employment Situation report is the difficulties there are to trade the NFP release through broker platforms. We constantly hear about the increase in bid/ask spreads and prices not being accessible for seconds after the release. This is simply due to the lack of interest liquidity providers have to supply broker platforms with prices during the heated seconds around the release. Liquidity providers give priority to their own volume clients and could not care less about retail traders over these critical seconds.
Most Forex brokers now use Non-Dealing-Desk and ECN business models. They are not market makers. This means you receive the retail market price for your trades. During high volatility situations the market is either very thin or has a glut of orders that needs to be processed. In either case, the BID/ASK spread can widen, sometimes dramatically. Its not your broker's fault... that is the market price at that moment.
The information contained in this report allows you to place your stops adequately so you can minimise the risk of being stopped out at the release It also allows you to calculate your profit potential more realistically taking into account the higher trading costs derived from higher spreads.
TradeProofer.com is a Forex traders' community monitoring Forex broker spreads realtime. Its systems monitor dozens of Forex brokers' spreads moved around economic releases, such as the NFP announcement under the U.S. Employment Report.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. TradeProofer does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.
Recommended Content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.