When our economic nerd, Forex Gump , is in a good mood, he usually releases an article on upcoming news reports that you can play and with trade strategies to boot! Also, keep an eye on moves in the stock market. Especially the U. There are times where sentiment in the equity markets will be the precursor to major moves in the currency market. Now that we know which news events make the most moves, our next step is to determine which currency pairs are worth trading. Because news can bring increased volatility in the forex market and more trading opportunities , it is important that we trade currencies that are deeply liquid.
Currencies with deep liquidity have the tightest spreads which is what allows you to keep your transaction costs low. Remember, because they have the most liquidity, majors pairs usually have the tightest spreads.
Why Using an Economic Calendar is Important?
Since spreads widen when news reports come out, it makes sense to stick with those pairs that have the tightest spreads, to begin with. Then the final step is trading profitably with real money, micro lots and mini lots. Today in forex news the Bank of England base rate remained unchanged. The Monetary Policy Committee voted to keep interest rates unchanged. The announcement came today at GMT. The central bank also lowered its economic growth forecasts. This pairs sold off but it is not trending down on the larger time frames.
The Bank of England Base Rate news, or interest rate news on any currency is one of the criteria used for forex fundamental analysis for any currency. Interest rates drive currency price movement and trends.
Major Economic Indicators That Drive the Forex Market - Forex Training Group
Monitoring forex news is part of any great trading system. In this article we will give you a set of instructions for how to profitably trade currencies after the Non Farm Payroll NFP news announcement with specific charts, signals and techniques. We will show any forex trader how to enter trades in a window of time after the non farm payroll news announcement to take advantage of the volatility. This is not true at all, this article will detail and show traders how to profitably trade non farm payroll, after the news comes out, and give you a time line of how and when to enter trades and under what conditions.
The news announcement gives out the number of paid US workers of any business, but excludes government employees, farm employees and non-profit organization employees. Volatility statistics indicate that the non farm payroll news announcement is the most volatile of all scheduled US Dollar economic news drivers. The average movement of currency pairs is higher than any other news driver, so this is why traders are interested in trading to take advantage of this. The best thing to do is to wait until after the NFP news announcement at least minutes for the initial price spikes to settle down.
Then start to monitor the forex signals and forex charts we show you in this article and in the example below.
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In some cases the charts and signals may show you a good trade entry point ahead of the NFP announcement, in this case you must have your stops at break even prices on any open trades ahead of the NFP news announcement, or exit the trade manually ahead of the news. Any trades you make after non farm payroll NFP news would have the same characteristics as you would have in any good trade.
Traders can use a great rules based forex trading a system and mimic those rules after NFP. The only scenario you must be careful about is if a pair gaps up or moves up suddenly pips or more in the first few minutes after the NFP news announcement, this is when an entry can become much riskier. Traders expect movement from the USD pairs after non farm payroll, and this is logical since it is a news announcement related to the US economy. The example below shows that you can look for trades on any USD pair, however with the Forexearlywarning trading system you can look for trades on any of the 28 pairs we follow in the eight major currency groups.
Traders sometime look at the NFP forex predictions and results to try to trade from this information, we do not think that this is the correct approach. Just wait for the news to come out, then wait for the price spikes to settle down. At that point you should trust your charts and signals presented in this article, because they are highly logical and work well in almost every situation.
Demo trading NFP will prove your charts and signals work. On June 3, , here is how trading unfolded. After the NFP news announcement, about minutes later, the This pair continued down to an intra-day low of This pair closed the day at This pair was getting close to support levels on the H4 time frame, but in many cases we have seen on trending pairs, post NFP movements can be used to enter strong trends with considerable additional pip potential. The chart setup you see is our forex trend indicators , which are some very simple exponential moving averages, combined with support and resistance levels.
The heatmap is indicating clear USD weakness in real time and the trend indicators are showing the trend and support and resistance levels. This also served as an entry point into a trend with additional upside potential. So you could have also caught a buy entry on this pair as well while maintaining significant pip potential going forward. Another great trading opportunity after NFP on the same day. Then let the additional lots ride the trend. Concusions about Non Farm Payroll NFP forex trading — It is certainly possible to trade the non farm payroll news, just after the NFP news announcement, and this type of trading is certainly possible for any one of 28 pairs, not just the USD pairs.
You just need the right trading system that is flexible enough to give you accurate entry signals with much better risk management , under different market conditions. This article gives exact instructions on how to trade non farm payroll profitably, after the news announcement, and also shows you the trend and entry indicators used. If anyone tells you not to trade non farm payroll they are simply mistaken, or the trading system they are using is inadequate or not flexible enough for all market conditions.
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These same trading techniques and real time indicators also work after all of the volatile news drivers on the world economic calendar across 8 different currencies we track daily. Today in forex news the Chinese Yuan devaluation created strong movement and trading opportunities for forex traders. This was the biggest one day drop in the value of the Yuan in 20 years. This devaluation caused a strong reaction in the forex market.
Currencies in the Asian region and currencies of Chinese trading partners were affected by the devaluation. Most of the price movement and opportunities for forex traders today resulting from the Chinese Yuan devaluation were on these three currencies. The impact of the devaluation news can produce intraday or trend based trading profits for forex traders. As you can see below, the trading opportunities on the AUD pairs alone was significant. All three of these pairs are currently in up trends. This is a valuable lesson on how scheduled or unscheduled forex news or global events can bring profits to any trader.
Using this type of real time signal system is highly beneficial. The movements shown are significant intraday price movements. Traders can also move their stops to break even, thus preserving their upside potential for even more pips. It is important to remember that government interventions and devaluations have been tried many times in the past with various currencies.
These devaluations and short term price fluctuations are artificial, and usually short term, due to the high liquidity of currency markets.
The most important Forex news
The overall market forces like the larger time frame trends and interest rate direction will always be the strongest guide for the direction of currencies like the Chinese Yuan. In this article we will examine the various US Dollar USD news drivers, and how these economic news announcements impact currency traders on a day to day basis. We will also discuss several techniques for profitably trading these US Dollar news drivers.
There are various economic news events that drive movement on the US Dollar against other currencies. Currency traders watch these news drivers, looking for opportunities to buy or sell the major currency pairs for short term profits, swing trades, or longer term trend trading. See the example below of the world economic news calendar showing some scheduled US Dollar news releases. Volatility and price movement in the forex market can be expected after most of the scheduled US Dollar news announcements. Volatile US Dollar news announcements occur between 25 and 30 times per month, not to mention all of the volatile news announcements from the other seven currencies we trade.
There are plenty of times throughout the month when traders should be watching the market around these US Dollar news announcements. On Friday March 6, , the non farm payrolls US Dollar news was announced, like it always is on the first Friday of every month.
The figures that matter
Non farm payrolls is a monthly statistic researched, recorded and reported by the U. Bureau of Labor Statistics. Total non farm payrolls rose by , jobs for the prior month in February, shattering expectations for ,, resulting in the US Dollar strengthening. The employment situation report indicated that the February unemployment rate had fallen to 5.