Trading Plan|US Nonfarm Employment Change|1.9.09 13:30GMT
TON: Trade on News Plan
TIME (GMT)Jan. 9th, 2008 13:30GMT
News EventUS Nonfarm Employment Change
Forecast -510K ~ -500K
Trading currencyGBP/USD or USD/CHF
If Actual number is equal to or greater than -450K
Sell GBP/USD or Buy USD/CHF
If Actual number is equal to or less than -560K
Buy GBP/USD or Sell USD/CHF
Target and StoplossTarget:20-70 pips Stop Loss:20 pips
Measures the change in number of employed people during the previous month, excluding the farming industry. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP.
1 Nonfarm Payroll is going to be our primary focus of the day, and it is known to move the market any where from 50~200+ pips in a matter of minutes; it is the most volatile news release for Forex Traders. If you have never traded NFP before, we recommend that you turn off your PC and don't trade this release. If you have some experience trading it, then we suggest that you use extreme caution. The difficult part with this news release is the revision. Sometimes the revision will conflict with current numbers, and you would see the market whipsawing violently, taking out stops on both sides. Sometimes traders will react to the revision and completely ignore the actual release number. If Actual number is equal to or greater than -450K, we will look to Sell GBP/USD or Buy USD/CHF; If Actual number is equal to or less than -560K, we will buy GBP/USD or Sell USD/CHF.
2 Meanwhile, although we focus on US Nonfarm Employment Change, please pay attention to US Unemployment Rate which comes out at the same time, and be ready to get out of the market if these two news events are in conflict with one other.
3 If this News Event has a Revision Number and the Revision Number is in conflict with the Actual Number, get ready to breakeven your order or get out of the market immediately.
4 Historically, if the trading condition is hit, the chance of profiting could be very high.
5 This is our current outlook for this trade; however, it is subject to change as market conditions may change over time.
Warning: When dealing with this news, we should be more careful. Always wait for the Revision numbers to come out before trading, as a rule of trading NFP, wait for retracement for a safer entry. Test this news with small trades and get out as soon as possible, because it is hard to trade on the expected number, and contains too much uncertainty. Sometimes the platform will be also trying to play game as well.