Forex Signal (Thursday January 5, 2012 - 8:15am EDT (NY TIME) - ADP NFP

[Stavro D'Amore]

Hello all,

Today we have ADP NFP please see my plan below.

ADP Non-Farm Employment Change
Forecast 175K
Previous 206K
Pair to trade: USD/JPY
Triggers we need: BUY 45 SELL -45

Economical Impact: High
Typical Result: Actual forecast is good for the currency
Occurrence: This data Released monthly, about 2 days after the month ends.

About our Triggers:
If US ADP NFP number is forecasted to arrive at 175K
We are using USD/JPY pair, should our number be triggered we expect about 40 pips. We are using triggers of -45 for short.
If it comes out at +45 or better USD/JPY should go up by about 30 pips. We are using for +45 trigger for long.

Why do we care? And what is it?
ADP provides payroll services to many Businesses in the US. They use the data collected from their customers to derive the overall employment estimations. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

The total nonfarm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States. The nonfarm payroll statistic is used to assist government policy makers and economists determine the current state of the economy and predict future levels of economic activity


Method to trade this:
Stavro D’Amore Trading Method

Please keep in mind possibility of Revision number before entering any of these strategies.

Felix Trading
Trading descriptions

Prior to the release (10 mins) I will be looking for a short term short position in USD/JPY and I will get out of this trade 30 seconds before the actual release or any spreads that should widen.

I'd recommend spike trading as the best option when there is great uncertainty in the markets; also the liquidity is very good at the moment if you’re using an ECN broker.

I will look for a 50% retracement 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 time frame.

Historical Chart and Data for US ADP Non-Farm Employment Change



All the best

Stavro D’Amore

 

[PipDog]

40 Pip Spike on the USDJPY...Really?


Did you really expect 40 pip on this??? It would of been 50+ pips 2 years ago on this huge deviation, but that fact has absolutely no relevance to today's market enviroment. NONE!!

Stavro, inexperienced FX traders may be taking your advice to the letter. Your advice is reflective of prior history and has no correlation to today's market. You need to consider this. They may be losing real money.

In the current enviroment, there is almost no response to news. The overwhelming response is only to risk...which best correlates to the stock markets.

At least on this trade, the signal was BUY, the stock markets are down, and the UY is being pressed up a little in response. So, if you got in this trade, you could possibly make a couple of pips. If you took the signal/advice on the UK Services PMI, there was no way to do anything but lose.

Time is way past to trade in a manner that matches the current market enviroment.

 

[merital]

A release made at a given time can still have an impact on the market even hours later. We a dealing with people and their behaviour: fear, greed, etc.

Anyways, the insights that Stavro provided actually SAVED ME THOUSANDS. Although the released was made around 8:15am, even 2 hours later I was cautious not to short USD vs. JPY. Boy, what a heck of a difference it made in my trading. USD/JPY would spike upward then dip a little then spike upward again.

ADP Nonfarm Employment Change

Actual: 325K
Forecast: 176K
Previous: 204K

As Stavro pointed out:

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.

And so he was correct. Don't expect that after 30 mins. from the announcement, that it's the end. The trend can still continue ... nothing is written in stone so to speak.

 

[PipDog]

A release made at a given time can still have an impact on the market even hours later. We a dealing with people and their behaviour: fear, greed, etc.

You are mixing up causation and correlation, then throwing randomness into your algorithm. Good luck...

 

[Stavro D'Amore]

Pip dog it said you can expect, does not mean it will hit 40 pips I dont have a crystall ball that predicts the future.
But I wish we all did.

 

[PipDog]

Pip dog it said you can expect, does not mean it will hit 40 pips I dont have a crystall ball that predicts the future.
But I wish we all did.

Amen on that, Stavro!!