The monthly release of the NFP (Non-Farm Payrolls) figures is a highly anticipated moment for all traders. And this is with good cause, because the Non-Farm Payrolls has been historically known to shake up the market place quite a bit. Using a reliable NFP prediction strategy is something that many traders are after.
Just like most other news releases on the economic calendar, traders will use these figures to determine the strength or weakness of the underlying economy. NFP looks specifically at whether the US economy is expanding or contracting, based on the number of jobs added to the labour force. Having a NFP prediction strategy is a good way to be part of this action.
The NFP Prediction Strategy
This particular strategy has been tried and tested at Forex Watchers and Urban Forex. The videos above are two examples of live trading this strategy in a webinar.
The strategy itself is fairly straightforward. Find a correlating group and trade in the direction of the last daily candle. You can either choose to get in before the news is released or after. Both has it's pros and cons. Prior to the news spread are significantly lower, but there's the risk of the news spiking you out. After the news spreads will be higher, but you will have a bit more certainty on the direction - even when you miss a chunk of the move.
Final Words
Regardless of whether you intend to trade the news or maybe stand aside; remember NFP can be an exciting and will often bring unexpected volatility. If you do decide to trade, stick with your news trading plan and strategy, and always keep an eye on risk / reward levels. Because of the high excitement, emotions will come into play and it's not unwise to use a demo account for the first few times you trade NFP.
#UrbanForex - Be conscious of your trading!
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Editors’ Picks
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Editors’ Picks
EUR/USD maintains its bullish stance near 1.1350, look at Fedspeak
EUR/USD extends its advance above the 1.1300 level on Wednesday, supported by ongoing weakness in the US Dollar. Persistent trade tensions and renewed concerns over US fiscal health continue to pressure the Greenback, as markets look ahead to comments from central bank officials.
GBP/USD looks well bid past 1.3400, Dollar remains on the defensive
GBP/USD retreats from its earlier multi-year high near 1.3470 but continues to hold a firm bullish tone on Wednesday. The Pound remains supported after UK data showed annual CPI inflation accelerated to 3.5% in April from 2.6% in March, lifting sentiment around the currency.
Gold appears range bound near $3,300 ahead of Fed speakers
Gold regains the area above the $3,300 mark per troy ounce midweek, supported by growing fears of escalating tensions in the Middle East. Adding to the upward pressure, the US Dollar remains under strain amid ongoing concerns over US debt sustainability.
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The recent surge in US Treasury bond yields after Moody’s cut the credit rating of the United States (US) sovereign debt could be a wake-up call for financial markets, the kind of canary in the coal mine that ends up being remembered as a turnaround signal.
FOMO vs fundamentals: Retail buys the dip, institutional investors stay cautious
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