How to trade NFP??
I heard NFP is the most volatile news release for forex traders, it can move the market any where from 50~200+ pips in a matter of minutes, is that true?
And i also heard that "revision" number is very important when trading this news, any suggestion for trading NFP,and how to do with the revision number??
If you want to trade forex for NFP I would recommend trading IMM currency futures using a pro platform like X-Trader where you will get far better execution on your orders than in retail spot fx.
To properly trade the release I think you will also want access to a bloomberg or a reuters terminal where you can see the number come out in real time.
IMO the real opportunities exist when the number comes in way off expectation and the market reaction will be obvious - the only challenge then is to get into the market fast enough, which is easier said than done as it will be highly illiquid before the number comes out.
Here is a typical market reaction:
Payroll Employment Up > Bond Market Down, Stock Market Up
Unemployment Rate Up > Bond Market Up, Stock Market Down
Payroll Employment Down > Bond Market Up, Stock Market Down
Unemployment Rate Down > Bond Market Down, Stock Market Up
thank you so much, and would "ADP Nonfarm Employment Change" give some impact on NFP?
Originally Posted by dannybly
I think first and foremost you want to pay attention to the data coming out of the Bureau of Labor statistics:
Bureau of Labor Statistics Home Page
I'm not sure how much influence data from a third party such as ADP or the Monster Employment Index (Monster Worldwide - Bringing People Together to Advance Their Lives) will have.
One more comment on the NFP and the US Dollar:
A strong payrolls number could send interest rates higher, making the USD more attractive to foreign investment as well as being bullish for US stocks. Conversely a weak number could push interest rates lower and have the opposite effect.
trying to get an order fill at the price you want during that release can be very difficult. I would stay away from trying to buy/sell right at the release of US jobs data.
I've found in recent NFP releases to wait for the initial spike and then fade back to the prerelease market level. Of course, it all depends on what the actual number and revisions are as well. Anything crazy out of the realm of expectations may lead to a prolonged move from pre release price levels, so we'll just have to wait and see.
Originally Posted by dannybly
Thanks a lot! I have a bloomberg account, so i could get the actual number in real time, but if the release is obviously better or worse than the forecast number, do we still need to wait and see? do i possibly have enough time to get the first spike?
Originally Posted by vlad250
That's great that you have access to a bloomberg terminal and the data in real time - as I said ealier if you are trying to catch the initial move I would trade fx futures where you have a guaranteed counterparty etc etc
If you want to try trading the number through a retail fx broker I would suggest testing it out in a demo and being very cautious.
I think trying to get in a position right at the release is very difficult, high risk trade as the market moves very fast and you are prone to slippage, even when you have limit orders. It's not impossible, but very risky.
Originally Posted by hashimoto007
"Things turn out best for the people who make the best of the way things turn out."