NFP Non Farm Payroll and the EUR / USD 14



Have you heard of NFP or Non Farm Payroll whispered among forex forums?

About how caution should be employed as it is coming?

This IS a good advise.

I won’t explain myself what NFP is as Investopedia has a good explanation of it which i quote here “

What Does Non-Farm Payroll Mean?
A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees:

– general government employees
– private household employees
– employees of nonprofit organizations that provide assistance to individuals
– farm employees

This monthly report also includes estimates on the average work week and the average weekly earnings of all non-farm employees.

Investopedia explains Non-Farm Payroll

The total non-farm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States. The non-farm payroll statistic is reported monthly, on the first Friday of the month, and is used to assist government policy makers and economists determine the current state of the economy and predict future levels of economic activity. “

Looking at this we can see that it is indeed an important piece of information. Volatile moves of 100 – 200 pips within minutes have been known to happen for the EUR/USD.

If you are a scalper or simply don’t have evergreen SLs of 200pips or more, you WILL be taken out.

Yesterday was a NFP day and i have extracted the chart from the onset to an hour later.

Big moves you will notice and it is a ONE MINUTE chart.

The first minute would have easily taken out SLs on both side of the trade.

I stay out of NFPs. Always.

Remember, usually very first Friday of the month.

Trade safely.

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NFP Non Farm Payroll and the EUR / USD, 5.0 out of 5 based on 3 ratings
  • I agree that a short term trader should stay out of positions going into the NFP release. A short term trader will only hold a position for a couple of hours maximum and often maybe just a couple of minutes sometimes seconds. If I take a short term position which give me 10 pips in as many seconds, take it. As a short term trader you have your basic risk:reward ratio plus the additional time:reward ratio. As a sort term trader your goal is to have your funds exposed in the market for as little time as possible. If your money is not in the market, you cannot lose it (all other things being equal!!!!!). Thus you only want to expose your money for the shortest amount of time and get out hopefully at a profit having reached your target. Thus on NFP Friday as a short term trader – give it a break as there will be plenty of other opportunities during the rest of the month. If you must trade on NFP Friday, then at least wait until after the release and opportunities will open up. For a medium term trader, trades should be looked to be closed going into the release. Generally of my medium term positions, I will close those about to hit target, those at break-even and those close to their stop. The trades that are not doing very well i.e. about half way between their entry and stop, I will leave generally though every position is considered separately. Those trades that are doing nicely and are about half way to their target, I will almost certainly leave. The reason is that NFP release often confirms the general trend and mood of the market. Whist it is the biggest release, nevertheless it is influenced by all other factors and if the market is moving in your direction, the NFP release is likely to confirm that direction and possibly accelerate your position to its target. The classic example for me is my EUR/USD short. It is about 50 pips up as I type and has at the best been about 90 pips up. Also it should be noted that the trade has never been more than about 15 pips down. Now I think I have got the market direction right. It is a medium term trade as I expect it to be open no more than three or four day though possibly a bit longer because we have a weekend and UK bank holiday coming up. Thus I will hold this one through the NFP release and I am comfortable with it. My stop remains above the high 1.25037 which all being well should not be hit – ow if it does. If I am right about my assessment with the outcome, it could be a nice end to the week with a 200 pip winner.
    The long term trades should never be closed. These are trades likely to be lasting a week or more and possibly even a month and sometimes even more. Being flat on the first Friday of each month would destroy the concept of a long term trade.

    • Susan Tate

      Hi George…I like trading on the big news releases

      • Risk taking koala there !

        • Susan Tate

          Hi Koala…..I know….Exciting…lol….And I won….I was selling on the Aud/Usd,coz I felt sure that the NFP news would make the price go down…The Aussie is so weak at the moment that any news seems to make it go down…:)

  • Really the best advice is to stay out of trade before Non-Farm Payroll release, it is better to be alive so as to fight another day

  • Elmar Silveira Votri

    What a fear today! haha I´m out anyway. Probably I´ll trade only next week!
    Nice weekend friends!

    • Proper money management rocks !

      • Sach

        I agree with you Susan! But, at the same time I have to admit that I have lost a lot of money trading AUDUSD. But it wont stop me…. Good Luck Traders and Make lots and lotsa Pips today and everyday 🙂

        • Wayne Doss

          Well I took Koala’s advice and bought at .8895 and currently up 133 pips on AUDUSD. I also am up 50 pips on AUD/JPY. Thank you for the heads up… I am long term AUDUSD but will be out of AUD/JPY shortly.

  • Elmar Silveira Votri

    Thanks the advice friend. Today will be harsh!

  • Wayne

    Thnak you Koala for your advice I bought at .8895 and currently up 133 pips on AUDUSD. I also am up 50 pips on AUD/JPY. Thank you for the heads up… I am long term AUDUSD but will be out of AUD/JPY shortly.

    • Glad to hear of your wonderful harvest 🙂 trade safely ! US Non-Farm Payroll is near …

  • OlumoRock

    Thanks Mr.
    My initial stop @3677 is threatened, but better to stick to it than to exit the trade since it has escaped the ECB volatility, also, my earlier target @ 3485 didn’t quite make it, but I escaped by booking 70% @ 3570 for +55pips, I’m holding on to the remaining till confirmation or stopped out, thanks Mr Koala.