The Non Farm Payrolls 5 Tips to Trade them

Hi another week is coming and it will be a busy week ending with the king of forex the release of the Non Farm Payrolls, I hope you like this 5 tips I am posting. If you have another one please let me know it will be great if we can help each other out.

Let´s start:

  1. If you are new, stay away: Trading during this volatile period is very risky.
  2. Strange moves begin in the markets well before the release at 13:30 GMT. This usually reflects the expectations – expectations which aren’t necessarily met, and they can lead to a counter reaction afterwards. This friday the trading intensifies with the release of the Canadian employment figures, an hour and a half before the American ones.
  3. Friday is always a volatile day: Strong moves in a certain direction – either dollar strength or dollar weakness, can be seen hours after the release, usually in the last hour of the London session – between 16:00 to 17:00 GMT. This is the move that will determine the close of the week, and thus have a real long term effect. This is the full reaction.
  4. Support and resistance lines, uptrend support or downtrend resistance lines can be breached around the release of the NFP. This is usually only temporary.
  5. The initial reaction to the release is in the wrong direction: the reaction is usually “normal”: good data yields dollar strength and bad data yields dollar weakness. We are still in the global crisis, and the risk factor rules. So, minutes after the “normal” reaction, the risk factor kicks in and eventually the opposite happens: good data yields dollar weakness (risk appetite), while bad data yields dollar strength (risk aversion).

I hope it iwll help you trade better and make some good pips this friday.

http://www.fx-megaforex.com

Fx-Megaforex making smarter investors.

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