Trading the Non-farm payroll data might be the most difficult task in the Forex market. But those who have extensive skills are making a decent profit by taking advantage of the NFP data. So, what is NFP? This is nothing but the data which reflects the number of jobs that has been added to the U.S economy. When more jobs are added, you can expect a strong rally in the U.S dollar index. On the contrary, when the NFP data fails to meet the expectations, the mighty U.S dollar trades significantly lower against the major currency pairs.
So, can we trade the NFP like the elite traders in Hong Kong? Well, the answer greatly depends on your skills and trading environment. Today we are going to give you three simple tips that can help you trade the NFP data with a high level of accuracy. Follow these rules and you can trade the most dangerous news in the Forex market.
Find the critical support and resistance level
Trading the news doesn’t mean you will not be dealing with the critical support and resistance level. Most of the time the market surge higher to test the critical support and resistance on the event of NFP news. Those who are skilled wait cautiously or set pending orders at those critical levels to make a profit from this market. But setting up the pending orders at those levels is a very critical task. Unless you learn to trade this market with proper discipline, it will be really hard to make big profits. At the initial stage, try to use the manual execution process as it greatly improves your success rate. However, manual execution of the trade requires strong confidence as the market remains extremely volatile. A few seconds delay in the trade execution process can result in a big loss.
Trade with the best broker
You must trade with the best broker to trade such high impact news. The navie traders are always using the low-end trading platform and experiencing heavy slippage on the event of such major news. On the contrary, the elite traders use the SaxoTraderPro trading platform to ensure quality executions of the trade. You won’t have to face any heavy slippage or experience widespread. Some of you might not be aware the spread becomes wide on such events. Unless you learn to deal with the dynamic spread efficiently, you are not going to make any profit. Most of the time the trades will result in small profit big loss. To avoid such a situation you can choose to trade the market with brokers like Saxo Capital Markets since they always ensure a premium environment for the retail clients.
Reduce the risk at trading
When you trade the major news like NFP, you must reduce the risk of trading. Taking too much risk to trade the NFP data and pushing yourself to the aggressive method is a very big mistake. Though you will be trading a volatile market, you need to remain calm. The trade execution process greatly depends on the trader’s mentality and risk exposure. Since the movement will be high, you should limit the risk to 1% to protect your trading capital. Forget the fact, trading is more like dealing with a falling knife. Do you think the skilled people are afraid of catching a falling knife? They have always taken preventive measures since they can deal with the worst-case scenario. Just like this, you should trade the major news with preventive measures.
Trading NFP will become easier if you follow the rules mentioned in this article. Never break the rules of money management if you want to become a skilled news trader. Stop focusing on short term gains and trade the news with managed risk. And never lose confidence when you start trading the NFP news.