News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.18% Gold: -0.05% Silver: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/oXdl8CHoGU
  • The New Zealand Dollar may resume its broader uptrend, with NZD/USD and NZD/JPY eyeing key rising support. NZD/CAD and NZD/CHF appear to have more room for near-term losses, however.Get your market update from @ddubrovskyFX here:https://t.co/6hD7zsNHIh https://t.co/NaOCtsHiYZ
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.19% 🇳🇿NZD: 0.05% 🇨🇭CHF: 0.04% 🇯🇵JPY: -0.04% 🇬🇧GBP: -0.05% 🇪🇺EUR: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/WjzgZe8s8k
  • Heads Up:🇦🇺 RBA Kearns Speech due at 03:25 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-03-04
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.26%, while traders in Germany 30 are at opposite extremes with 70.93%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NwFMRKxdiJ
  • Commodities Update: NYM WTI Crude 61.42 (+0.26%), ICE Brent Crude 64.30 (+0.36%), NYM NYH Gasoline 194.58 (-0.31%). [delayed]
  • Copper is on track to make a sixth consecutive monthly gain as prices inch towards its all-time high. The global backdrop remains supportive despite a short-term pause in the rally. Get your market update from @FxWestwater here:https://t.co/STEYeIG042 https://t.co/L6WceMn60d
  • Precious Metals Update: #Gold 1716.11 (+0.28%), #Aluminum 2,200.00 (-0.52%), and #Copper 9,101.50 (-0.75%) [delayed]
  • RT @KyleR_IG: The seasonally adjusted balance on goods and services surplus increased $3,009m to $10,142m in January. Goods and services…
  • RT @KyleR_IG: The January 2021 seasonally adjusted estimate: * Rose 0.5% month-on-month. * This updates the rise of 0.6% published in t…
Trading the Nonfarm Payrolls

Trading the Nonfarm Payrolls

Thomas Long, Course Instructor

This report can result in increased volatility and a chance to profit handsomely in a short period of time.

However, more often than not, new traders are not the one’s profiting but rather losing. The main reason is slippage, which is when your order is filled away from the price you wanted. The reason for slippage is simple, big traders stay away from these events and new traders all try to do the same thing at the same time. If the release is bullish for the EUR/USD, everybody wants to buy at the same time. However, most find that there is nobody willing to sell to them at their price. But eventually your order is filled, but at the seller’s price. Soon you find the market moving against you and you exit to keep your losses from getting too big. But what about those who were selling to you? As the market continues to fall, you start to wonder about these traders who sold to you and the fact that they are now making money. What did they do differently?

These traders were playing the reversal and taking advantage of the fact that the first move after a release is often based on emotions and wrong. Here is a 5-minute chart and an example of a reversal after the release of the Nonfarm Payrolls. We can see that just before the release, the EUR/USD was trading at 1.4892. After the release, the market started to rally up to near the 1.4940 level. The market then started to reverse and traders who were playing the reverse sold at the price the market was trading just before the release. The assumption here is that all traders who bought after the release are now in a losing trade and are selling to get out. So these new traders sell at 1.4892 to get in and use a 50 pip stop with a 100 pip limit order to take profit, which is what we recommend in our DailyFX Courses. This is our 1:2 risk:reward ratio and allows us to be profitable if only winning 40% of these setups. The market soon moved down 100 pips from the 1.4892 entry and rewarded those who were patient and reacted to the market environment rather than the emotional first response to the release. These reversal traders will also use the EUR/USD as much as possible in these situations because of the increased volume and better fills. But you don’t have to be first to get into the trade to be right, you just have to be patient and react to the market and not the news release. The EUR/USD doesn’t act like this on every release, but it does frequently enough to make this a valuable strategy.
 

nfp 030410

 

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES