NFP Trading - Huge Gain or Great Risk?

[aparsai]

Those who are familiar with economic indicators know that usually none of them move the market the way NFP or non-farm payroll does. I have written an article that explains this indicator and fundamental or technical approaches to trade it. Click here to read the article.

Your comments are welcome. They will certainly help me to improve the quality of my tutorials.

 

[new_trader]

A perfect guide to losing money. Only fools and amateurs trade 'the news'.

 

[aparsai]

A perfect guide to losing money. Only fools and amateurs trade 'the news'.

I personally used to trade news and in contrary to what you say I made more money than losing but I eventually quit news trading. To be honest with you I didn't have the nerve to trade news all the time. It is too risky for me. I am more of a swing trader.

Anyway, if you read the article you will see that it does not suggest news trading.

Thanks for your input.

 

[new_trader]

I personally used to trade news and in contrary to what you say I made more money than losing but I eventually quit news trading. To be honest with you I didn't have the nerve to trade news all the time. It is too risky for me. I am more of a swing trader.

Anyway, if you read the article you will see that it does not suggest news trading.

Thanks for your input.

Fair enough. I didn't read the entire article but seeing this was enough

How to Trade NFP?

There are many methods for news trading. I provide you with two simple approaches below. I need to mention that no matter which method you choose there are a few things you need to keep in mind.

What I should have written was:

Only fools and amateurs trade the news.

 

[aparsai]

Fair enough. I didn't read the entire article but seeing this was enough



What I should have written was:

Only fools and amateurs trade the news.

Thanks again. If you spend some time in the future and read the article you could certainly help me improve it.

 

[arabianights]

A perfect guide to losing money. Only fools and amateurs trade 'the news'.

nonsense

 

[KillPhil08]

Fair enough. I didn't read the entire article but seeing this was enough



What I should have written was:

Only fools and amateurs trade the news.

load of ****e

 

[Joey25]

Note the high and the low of the half-hour period following the release.

Hopefully, it will be a spike, and even better the next half hour won't touch one of the extremes.

This "virgin" extreme is a good probability fade at the first test.

 

[Martinghoul]

I used to trade the NFP by trying to forecast it using various other economic indicators and it was moderately successful. It really depends on how sophisticated a model you want to build.

As to your article, I didn't read the whole thing, but, I suppose, it's useful for someone who has no idea what NFP releases are all about. As GJ pointed out, there's a whole lot of 'devil in the details', such as the 'real' consensus, the BLS birth/death adjustment, the various seasonal and one-off effects. It's not rocket science, but it ain't a walk in the park either.

EDIT: Sorry, GJ, I didn't realize I was repeating what you said pretty much word for word... DUH!

 

[wasp]

NFP is one of the biggest causes of complaints on forezpeacearmy and forexfactory as 99% of all amateurs will straddle it or try and get in 'market order' 20 seconds after the announcement, then bitch for days when both their orders get spiked and hit and the broker slipped them by 20 pips! Makes me laugh.... Seen it so many times back in the old 'live cable thread' month in and month out for years! I concur with GJ.

Besides, NFP ain't what it used to be....

 

[aparsai]

Actually you started going on about straddling so you kind of did talk about news trading imho.

Personally, my opinion is that the article is amateurish, basic, unhelpful (straddling in these markets is pretty silly imho) and crucially it misses the one thing that makes retail traders the world over do their cods EVERY month trading nfp - market short term positioning and market rumours.

For example, today, consensus is for -650k. Another shocking number of course. But if the print is -700k (i.e. even worse!) there's a good chance people will buy dollars. Why? Because a rumour went round the market in Asian time that there could be a print in excess of 1mio!!!! So the dollar has already sold off overnight / this morning.

NO guarantees this will happen, and rumours are exactly that, but crucially this is what the interbank market is looking at right now.

Plpus I think I'm right in saying that it didn't mention the U-rate right? That is as often a driver of the bigger moves as the headline NFP print.

Plus it also didn't mention the need to have a knowledge of the seasonal factors (birth death model etc). Do you even know what I'm talking about?

Plus no mention of ADP.

Like I said, basic and amateurish. But thats just my opinion.

GJ

Thanks very much for your feedback. I keep it all in mind.

 

[aparsai]

I used to trade the NFP by trying to forecast it using various other economic indicators and it was moderately successful. It really depends on how sophisticated a model you want to build.

As to your article, I didn't read the whole thing, but, I suppose, it's useful for someone who has no idea what NFP releases are all about. As GJ pointed out, there's a whole lot of 'devil in the details', such as the 'real' consensus, the BLS birth/death adjustment, the various seasonal and one-off effects. It's not rocket science, but it ain't a walk in the park either.

EDIT: Sorry, GJ, I didn't realize I was repeating what you said pretty much word for word... DUH!

Thanks for your input.

 

[aparsai]

NFP is one of the biggest causes of complaints on forezpeacearmy and forexfactory as 99% of all amateurs will straddle it or try and get in 'market order' 20 seconds after the announcement, then bitch for days when both their orders get spiked and hit and the broker slipped them by 20 pips! Makes me laugh.... Seen it so many times back in the old 'live cable thread' month in and month out for years! I concur with GJ.

Besides, NFP ain't what it used to be....

Thanks for your feedback.

 

[aparsai]

Thanks to all of you for your feedback. As you have realized the intention of this article was an introduction to the subject. I will consider your good feedback and will try to either improve the existing one or add a new article that completes the mission.

 

[Claudia123]

Trading NFP is for the brave and them in the know. Trade once a month it will only go one way or the other. 50/50. Not for me though. And news trading is like trading moving averages - its old. Trade the future not the past - price action please!

 

[new_trader]

nonsense

Do you ONLY trade news releases?

 

[new_trader]

"Money is made by anticipating what is coming, not waiting till it happens and going with the crowd"


"The reason for what a certain stock does today may not be known for two or three days"


Two quotes from people who know exactly what is what and what is not. You kids carry on with your pretty coloured lines and stuff..

 

[superfly]

Maybe not completely on topic, but still its about impact news can have

=============
Trade The News:

One of the pretexts of technical analysis is the theory that news is already reflected in price. Nonsense. Markets are organic. Market moving institutional participants are constantly reevaluating their positions based on evolving perceptions of fundamental information. Think of the market as a basketball game. We're watching a half court offense methodically passing the ball around the perimeter in search of a high percentage shot. Suddenly an athletic defender intercepts the pass and runs down the court uncontested for a slam dunk. That defender's name is News and he can spoil even your most conservative plans. News often comes unannounced. News can be as subtle as a dry Sunday in July when perceptive traders figure out there's a potential drought and push futures to an up limit open on Monday. No matter how mechanical and detached your approach you'll be frequently confronted by decidingly anti-technical factors.

Pabst