NFP - 20150403 - AUDUSD

Another clear example of how the market usually behave during NFP news. 

AUDUSD/5 min chart

1. Watch for news for one side bias
2. Enter on pull back 50% of the first 5 min candle
3. Enter trade on pull back
4. Wait for trend of news to continue
5. Exit at 90% high/low of first 5 min candle 
6. Sometimes trend would continue beyond the high/low of the first 5 min candle; other times the first 5 min will show you the max swing distance of the pair
7. When the hype is over price would retrace and resume it course

How I trade NFP

There are so many ways of trading NFP but below to me is the most comfortable way of trading NFP.

Need to know / What I perceive ?

• NFP is always release together with another important USD news "Unemplyment Rate"
• Only Trade NFP news when resule of "Non-Farm Employment Change" and "Unemployment Rate" do not contradict each other. It must show a clear sign of one sided bias.
• NFP generally move 100 pips, if I missed the first 100 pips after news trade is over. There is no point of risking what I have for what you Might gain.
• NFP move would be done within 15 min, if I do not have a position after 15 min I do not trade.

Trading NFP / My train of thought during NFP.

1. Wait for the news; decipher the result if it is one side bias
2. Look at the chart in 5 minute, watch for the spread during news release ensuring that you do not enter a trade when the broker has increase the spread. Be patient...
3. Watch and enter on a massive pullback about 50% of the first 5 min candle
4. Exit the trade as soon as price reaches 90% of the high/low of the first 5 min candle.
5. Call it a day win or loose, do not force the market.

Example: 2015 April - NFP

Wait for news release, watch for one side BIAS.

Example USDCAD/5 min chart

1. Watch for news for one side bias
2. Enter on pull back 50% of the first 5 min candle
3. Enter trade on pull back
4. Wait for trend of news to continue
5. Exit at 90% high/low of first 5 min candle 
6. Sometimes trend would continue beyond the high/low of the first 5 min candle
7. When the hype is over price would retrace and resume it course

Trading NFP

Almost every Forex Trader would have heard of NFP, but not ever trader understand NFP or know how to trade NFP. I believe that if one do not understand what they do, it is as good as placing a 50:50 bet. There is a reason why they say "knowledge is half the battle". As I am highlighting NFP to a fellow trader in his own journey to FX Trading, I believe it would benefit others to start a section on NFP that I will try elaborate how one should trade NFP.

What is NFP? 

Non-Farm Payrolls, is an economy news release of US's non-farmer employment changes. This news release highlight the changes of employment for the previous month excluding the agriculture sector. 

How often does this happen? 

This news release usually happen ever 1st Friday of every Month at 8:30AM EST. One can track the details of NFP news and its numbers from http://www.forexfactory.com/

Why is NFP so important?

As USD is currently the world's base currency in any exchange; if it catches a cold the others would feels its sneeze. If USD strengthen, anything trading against the USD would feels the move.

What imapct can NFP make to the market?

Anything tag to the Dollar would swing, spike or even skip a beat. The market move in a minute what it would usually take hours to accomplish. I personally generalized NFP move at an average of 100 pips even though at times it would double and triple that particular amount depending on a particular pair.

Advice: Trade at your own risk, do what you feel most comfortable with.