Trading strategy on Nonfarm Payrolls is quite simple but very effective and allows you to make a profit in the range 100-150 points within 1-3 hours of trading, but it requires certain skills of trade, which I’ll explain below.
Nonfarm Payrolls — a very important economic indicator the United States, which goes into 16:30 MSK in the 1 st Friday each month (next time it will be published August 7, 2009 — ie, tomorrow). Immediately after its publication, the reaction of the forex market on the way out of this news is very powerful, and it follows that the output of this news can be good money.
Usually the day of publication Nonfarm Payrolls are very few traders come into the trading process to the release of Nonfarm Payrolls (abbr. NFP). During this period, the forex market often provides false breakouts levels or traded within a fairly narrow (30-70 pips) range. And the main trading capacity will be involved at the time of the news.
Thus, the essence of forex strategy «Trading on Nonfarm Payrolls» as follows:
5-10 minutes before the publication of indicators NFP should be set pending orders on the trading terminal MT4. Because NFP is difficult to predict, and the reaction of the forex market to the published indicator NFP generally unpredictable, so you need to place a pending order in 2 opposite sides (buy and sell).
If you have an open trading positions until the NFP, it’s still better to close, because even if you install a safety stop-loss order closer to the price and the market will open to the side against you with a gap, then you risk that your order will be closed not at the price stop-loss, and the market price at the time of the news (for the price discovery gap), and sometimes it happens and 20-70 points, which can be very detrimental to your deposit. Although if the market opens in your direction — you can earn good money — that is, 50% to 50% — of course you decide …
Basically, after the publication of NFP, the market in the first minute has a tendency to move in one direction, then usually there is a sharp move in the opposite direction. Therefore, to try to avoid unwanted operation of our pending order, putting them at a distance of 35 pips from the level of prices to the news (see Figure 1):
Figure 1 — Putting the pending orders before the release of Nonfarm Payrolls
So the pending orders were issued. And now it is necessary to take care of stop-loss orders, they must be put at a distance of 20-30 pips from entry price in the market. And importantly, remember — stop losses should be set simultaneously with setting a pending order for the breakdown (this is necessary if you suddenly lost your DC link or the price will behave poorly to the news or after). To do this simply ideal «trailing stop of 1 item Advisor for Metatrader 4″ (it has everything you need to» trade on news «, while working just perfect and all-time trading had never personally me down).
At the expense of take-profit, I usually put him at a distance of 70-100 pips from entry price in the market.
After the data were published Nonfarm Payrolls (16.30-16.31 MSK), the price on the forex market is very dramatically, «jerk» or up or down. Likely that one of your 2-placed pending orders will be opened. If you notice a gain on a deployed warrant privyshayuschuyu 25-30 pips, you must very quickly move the stop loss order in the «breakeven», and a second warrant to remove (again, «trailing stop» — in this case, just your friend, he gives the order to permutation order garazdo faster than a human).
And now you have 3 options:
- or you’ll trail your order at a safe distance — 10-25 points (depending on the chosen currency pair and volatility on the market than it is stronger, the smaller the Trailing Stop and pitch)
- or behave as expected price (in this order must already be moved to zero)
- or else close the portion of the profits (eg 50%), while the rest remain in the market.
After 20-25 minutes after the publication of data on Nonfarm Payrolls must identify focused on the forex market.
If profits were not you fixing earlier in the period 16:45-17:05 — it’s time to do it.
If the market has opened one of the warrants and the price hovered about the maximum for 10-15 minutes on one important level (hang — the movement in the price range of 15 pips without further promotion price). In this case, the need to quickly fix the profit received by you, because expected to turn in the market. It was freezing prices on the forex market said that the mood is changing.
See figure. 2:
Preparing for the renegotiation of deals (16:45-17:05)
So we got of the profit from the first deal and now must decide how to trade on.
There are 2 options:
trade in the direction that intervened a second order
wait where will the price and move along with it.
And just work pending orders in 2 opposite directions.
Immediately after the closure order — are putting two pending orders — 1 st pending order is directed towards you last closed the trade (the order of the breakdown should be within 10 pips higher( (lower) maximum (minimum) Hi (Lo) on Nonfarm Payrolls (see Figure 3)), 2-nd put up on the basis of 50% — 5 pips (if the market price is greater than fifty percent growth (decline), it is very likely that will come back to the beginning of his movement to the news) — see Figure 3:
Figure 3 — Preparing to enter the market (again)
Repeat the conclusion of transactions (time 16:50 — 17:10)
Once you enter the market again by one of exposed deferred ordere, the second can be removed. Stop-loss is just as necessary as soon as possible to put in the «breakeven» in order to avoid possible losses.
So, if you have opened a pending order in the direction of the first of your open orders, it means the purposeful movement of prices, and it tends to last for at least 70-150 pips.
After the 2 nd entrance opening order you may encounter with the new hang-market prices (from 17:10 do17: 50)
A re-freeze the prices are most likely near the starting point of the movement after the news on Nonfarm Payrolls. So if you notice the repeated hang for 10-15 minutes — fix profit as quickly as possible.
The last entry in the market in Nonfarm Payrolls (from 17:50 to 18:10) is possible at the breakdown point of freezing the market.
Open in the opposite direction, I categorically do not need, because if the market price again returns to the half of the span after the NFP, it will say that the forces of «bulls» and «bears» on the currency market are approximately equal, and the price move in the direction of least resistance at this point is quite difficult. Pending orders are putting the same pattern: high or low 10 or -10 pips — see Figure 4:
Figure 4 — Entering the final market.
The last time to take profits to a range of 18:50-19:30 GMT.
But still the best option, in my opinion — is the trade with trailing stop at 10-15 pips and close a position on the order «stop-trade (the same» stop-loss «, but in the positive area).
Evaluation of the results of trade in Nonfarm Payrolls (NFP) — trade was successful, if the profit after fixing all orders on the news was about 100-120 pips. But there are moments when the forex market provides an opportunity to take profits over 150 pips — and this is simply not reasonable to not use it!
