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Forex Signal (Friday October 7, 2011 - 8:30am EDT) - US NFP Employment Change

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Oct 6, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello Members,

    Before we wrap up the week with our last news trade, please find my trade plan for US NFP Employment change

    US NFP Employment Change
    Forecast 53K
    Previous 0K
    Pair to trade: EUR/USD
    Triggers we need: BUY -60 SELL +60

    Economical Impact: High
    Typical Result: Forecast is good for the currency
    Occurrence: Released monthly, usually on the first Friday after the month ends

    About our Triggers:
    If the US NFP Employment Change number comes out at +113 or more, the EUR/USD should go down by about 40 pips. We are using a deviation of +60 for the short.
    If it comes out at -7 or less EUR/USD should go up by about 40 pips. We are using -60 to trigger for long.

    I would usually consider trading USD/JPY but strongly believe that current conditions id not suitable for this pair.

    What is it? Why do we care?
    The Nonfarm Payrolls measures the change in the number of employed people during the last month of all non-farming businesses. The total non-farm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States.
    It is the single most important piece of data contained in the employment report, which considered offering the best overview of the economy.
    The monthly changes and the revisions in payrolls can be quite volatile.

    A higher than expected reading should be taken as positive/bullish for the USD
    A lower than expected reading should be taken as negative/bearish for the USD.

    Method to trade this:
    Stavro D’Amore Trading Method

    Pre News
    Prior to the news release (20 minutes) I will be looking for a short term LONG position in EUR/USD and I will get out of this trade 2 minute before the actual release earlier. I eill look for momentum long indicators.

    Spike
    Yes. I would recommend spike trading as an option.

    After Spike
    If your are not spike trading or if you did do a spike trade and your already out, I will look for a 50% retrace in the original spike before entering a trade. I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at entry price. My TP level would be just before a resistance level or if the chart decides to form a level, looking at a 15 min chart.

    Historical Chart and Data for US NFP Employment Change

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Oct 6, 2011
    Lasted edited by : Sep 8, 2016
  2. PipDog

    PipDog Corporal

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    Take a Look at the Stocks Before The Trade

    Do yourselves potentially a big favor and check out: 1. The European stock markets, and, 2. The US stock futures BEFORE you set up for this trade. If stocks are up big...be careful about selling the EURUSD (strong USD) on a good number. If stocks are down big...be careful about buying the EURUSD (selling the USD). To ignore this advice would be going against the risk aversion trade, and that could cost you big.

    If stocks are basically flat, then the market is waiting on this news and I'd say your off to the races on a big deviation either way.

    Personally, I'll not be trading this spike. I'll look for stocks up and a good number, then buy the EURUSD after it takes a trip down, or, I'll look for stocks down and a bad number, then sell the EURUSD after it spikes up and levels off. Of the two scenarios, I like the second one the best.

    When risk aversion is in play (like it has been recently), it's best to have your strategy figured out before the news and trade with caution.

    Good luck.
     
  3. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Pip dog,

    When there is uncertainty in the markets is the best news trade.
    EUR/USD is acting well it’s at the correct levels fundamentally.
    Yes I do look at the news and markets all day, My back ground knowledge in markets is not in FX JUST its on a global scale from stocks bond futures and even Forex and Stockbroking operations.
    I have worked for Merrill Lynch and many investment banks and Forex companies so when it comes to risk its my number one goal.

    I’m sure members will see the results at the end of the day I provide signals here for FREE to assist people not to make profit from them, If I wanted profit from them I would advertise my personal services here and that I don’t do. So some times free advice is the best.

    Cheers
    Stavro D'Amore
     
  4. digamer

    digamer Private, 1st Class

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    So is the eurusd the best pair to trade NFP?
    I had success trading USD news on usdchf and read about trading on JPY crosses (eurjpy, gbpjpy, cadjpy...not just usdjpy). During past 4 months I also noticed that trading other news then NFP on eurusd is pointless.
    Any opinions?
     
  5. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    You can use USD/JPY if you all wish. There is nothing stopping you. If you want USD/JPY just do reverse to my triggers.

    Regards

    Stavro D'Amore
     
  6. digamer

    digamer Private, 1st Class

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    It would have been nice to get "a bit" more informative opinion and answer to my question on currency pair choice from you, Stavro, or other experienced traders. I think many FPA readers would benefit from it.
     
  7. intruder53

    intruder53 Recruit

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    Hello I am a newbie and do not understand something.
    "I will look for a 50% retrace in the original spike before entering a trade."
    How do you go into the trade? LONG or Short?
    Best Regards
    brUNO
     
  8. TonyaSerkova

    TonyaSerkova Recruit

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    :err:
    Is it me or the market did the opposite as it should do?
    US NFP 103K is possitive for USD , so EUR/USD should go down,it went up instead. any1 can explain this?
    thanks
     
  9. ALF

    ALF Private, 1st Class

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    ...........
    'I have worked for Merrill Lynch and many investment banks and Forex companies so when it comes to risk its my number one goal.'

    ..............

    Cheers
    Stavro D'Amore[/QUOTE]

    Stavro, was the reaction of EUR USD according to your plan for trading the news for US NFP?

    In my opinion - NOT AT ALL!
     
  10. PipDog

    PipDog Corporal

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    Yeah, Big Surprise...


    It's called risk. There is risk aversion, and, risk on. In this case, risk on due to the good number. So...the USD often does just the opposite of what the news event indicates it should. Recent history suggests that risk has been the big player.

    Did you happen to read my first post?

    I traded the AUDUSD on this one. The AUDUSD has been correlating very well with stocks. I went long AUDUSD...yes, even though that seems to be against the grain of the news...and made just under 40 pips.

    Anyone that traded this pure USD probably got whacked. Unless you traded the USDJPY.
     

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