NFP

An article by Gus    No Comments

Nonfarm Payroll, one of the most volatile times for day trading every month. Talk to any season forex trader and the release of the NFP every month is time to get out of the market or get ready for some risky trading. There have been many times where I have seen in currency trading prices move 300 to 500 or more pips in just minutes. For this reason when nonfarm payrolls are about to be announced you will see a giant drop in liquidity since every trader will be pulling out. Once most traders have pulled out of the market volatility will go through the roof. With so little money being traded and the big players such as private banks and central banks will be able to unload large amounts of orders and move the market one way or the other, meaning the little guy has no chance.

You might get lucky and ride the wave to nice profits but as you will find out the difference between the expected NFP number and the actual is normally very different and you might not be able to get out in time to not loose all your money. Nonfarm payroll are one of the biggest indicators of how the market is going.

The report includes a lot of things besides just how many jobs were added or lost in the economy during the previous month. The report also shows what the unemployment rate is in the economy as a percentage of the overall workforce. Also which specific sectors gained or lost jobs, and how hourly earnings have changed. And lastly they include revisions of previous nonfarm payroll reports which have to be relooked at again to clear all errors.

This report is one of the most important mainstream release that affect market conditions and give us a great perspective on what the future holds for the economy. Anybody who is serious about trading and investments overall has to make sure they keep an eye on this. You should be able to get the release information from major news networks that cover market hours such as CNBC or MSNBC and if not online plenty of sites have news widgets that refresh to give you second by second market numbers. I wish everyone good luck with trading and their investments, Just remember you never know enough and you can always learn something new.

Thanks, Gus FX