At the start of each trading session, you will receive an email with the author's new posts. Once per month, financial markets regularly take on the big spotlight. Every first Friday of the month, at We also get from them valuable insights and tips to trade before and after the event. The answer to this question can begin with a simple analogy. Better employment numbers more payrolls added , good for the USD; worse numbers, bad for the buck.
This will help you trade the NFP. Measuring the impact that macroeconomic data such as the number of payrolls or the rate of unemployed people has on the markets is difficult and complex. Several methods, strategies and tips can be used. Our contributors share some of them in their reports:. The hours that precede the release of the employment report may be decisive.
McDonell also does some modeling on related macroeconomical data to elaborate its fundamental analysis. That is key on the preparation of the trades to set up just after the release.
Viktor Eperjesy , Head of Business Development at Trade Proofer , is an expert in gathering information on the brokers' spreads, something every retail trader must take very carefully into account. During these minutes spreads first fall apart and recover slowly afterwards as market calms down. The minutes just after the release tend to show big moves in the prices of the majors , but the volatility usually continues for several hours.
Kenny Fisher believes in trading not only the actual release against the expectations, but also against the previous figure. Fisher sticks to the basics: The market often trades that new information instead".
In a more advanced analysis, Wayne McDonell proposes another strategy for scalpers , those traders willing take quick trades and profit from short-term swings.
FX Bootscamp's trading coach believes there are several problems with this, such as potential whipsaws , wide spreads and slippage. As you may note, our experts have different point of views, techniques and feelings towards the Non-Farm Payrolls release. There isn't one only way to approach it. The strategy to trade or not the release every trader should take is finally something to their choice. We hope these different views shared here can help you to take your own one and succesfully manage your accounts when trading this very highly volatile macroeconomic event.
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Close alert You've unfollowed this author. You won't receive any more email notifications from this author. The many economies peg tie their currency's value to the reserve currency, many commodities such as gold and oil are priced in terms of the reserve currency and the local economy's debt is priced in terms of its own currency.
The Non-Farm Payroll report, because of its importance to the reserve currency, tends to move all markets: It does so immediately after the release of the economic data and sometimes dramatically.
Still, there is no denying to the impact of the data on the markets. Let's use a stock market analogy to answer this question. Just like a company's stock often rises after the company releases a strong financial report, so to the US dollar can be thought of as the "stock of the US economy".
Thus, when the US releases a strong economic report, the "stock" US dollar often rises against other currencies such as the euro, pound or yen as a result. Conversely, a weak NFP report indicates that the labor market is weaker than what the markets anticipated, and a weak reading can push the dollar lower against other currencies. But there's much more to this question. Our contributors share some of them in their reports: Before the NFP release The hours that precede the release of the employment report may be decisive.
After the NFP release The minutes just after the release tend to show big moves in the prices of the majors , but the volatility usually continues for several hours. Final tip As you may note, our experts have different point of views, techniques and feelings towards the Non-Farm Payrolls release.
Trading the Non-Farm Payrolls:More...