How I Trade NFP
NFP is usually released on the first Friday of every month.
In short, The nonfarm payroll (NFP) report is a key economic indicator for the United States. It represents the total number of paid workers in the U.S., excluding those employed by farms, the federal government, private households, and nonprofit organizations.
Traders and investors tend to put a lot of emphasis on this once-a-month report in search of quick returns. Most lose. Brokers win the day handsomely with their increased spreads.
You will never accumulate wealth trading NFP.
My approach is to stand aside in the few days in the build-up to NFP. This way, I avoid the added intraday noise.
I leave my open positions running and do not place any new positions.
This way, I avoid unnecessary losses and benefit from any momentum NFP injects into the market. Moves against me are almost always insignificant in the grand scheme of things.
I resume my regular analysis from the weekend post-NFP.
The Dollar Index
In my last post, I mentioned a potential cup and handle formation.
This was confirmed with further bullish strength and a breakout on Thursday's bar. I am now waiting to see if NFP injects any momentum and how the week ends.
Below is the daily timeframe
The forex market, particularly the dollar pairs, is looking promising after many years of stagnation and sideways markets.
The last significant trends in the dollar pairs were back in 2014/2015, when the dollar index rose by 26% in 12 months.
I would like to see a repeat of this. When the forex market trends, it covers ground quickly, meaning very healthy profit through holding and compounding.
When the stock market moves into a period of uncertainty, as we have seen through 2022 so far, the forex market often presents opportunities.
As an investor, it pays to have a global watchlist made of stocks, commodities and currencies, then, through a simple analysis process, moving to where the money is.
Instead of being attached to any asset or asset class, attach yourself to a process that takes advantage of trends across all asset classes.
You will see a dramatic improvement in your portfolio performance.
Image sourced from Shutterstock
This article was submitted by an external contributor and may not represent the views and opinions of Benzinga.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Posted-In: contributorsOpinion Trading Ideas
Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at firstname.lastname@example.org
How I Trade NFP