How to trade the Non-Farm Payrolls. Many ask themselves how do you handle such volatility. Well I guess non farm payrolls is more for the experienced traders, the volatility traders and the more “bavado traders” . For traders that make consistnt money with systematic repetitive trades during the course of the month, the Non-Farm Payrolls, they will normally sit out of the session.
Having said that, there are safe ways of trading the Non-farm payrolls. You need to be extremely disciplined, and try not get lured by the gamble of having a little “punt”.
First will explain to you How to trade the NonFarm Payrolls, then i will show you three examples, of a successful trade and two different types of No trading sessions.
1) How to trade the NonFarm Payrolls?
This is a strategy that I have used and have found that it is useful. It works on understanding what the traders’ and analysts expectations are and see if the data is better or worse than expected.
Volatility trade, trade it with a currecy pair: eurusd – liquid
gbp/usd
gbp/jpy – for those looking for a big break out.
so First you analyse the data.
Then you gather what the analysts expectations are in the market. this can be found on bloom berg or a forex news site
then you set your self a .20% deviation from the consensus, if this is broker you will get a certain reaction.
If The Data comes out worse or better than expected the currency pair you are trading will move strongly
Ok so lets run through an example.
During the Non-Farm Friday session there are two economic data that will affect the trade, the Non-Farm Employment Change and the Unemployment rate.