Trading NFP news. My ultimate Non-Farm Payroll strategy


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You can make money every month by trading the news. In this article I’ll share my simple Non-Farm Payroll strategy (NFP) that anyone can learn. Simply copy the steps in this tutorial.

How to make money every month by investing or trading?

First of all it is important to know that there are different methods to earn money every month from investing or trading. Some options:

  • Withdraw monthly profit from your long term investments
  • Recurring rental income from property investments
  • Revenue from staking crypto
  • Trade scheduled economic news events

All of these are great but in this article I’ll focus on trading economic news events.

News and numbers that come out every month at the same time

As you know, I trade mainly based on technical analysis and I try to stay out of the market when important news comes out. News with a lot of impact can cause prices to move considerably and often in an unpredictable way.

Of course you can’t predict all the news. There are a number of economic figures that come out every month on the same day and time. These news releases are perfect for banking some juicy profits on a monthly basis.

Economic calendar

I use an economic calendar to see which economic numbers and news items will come out. In my opinion, these are the two best calendars:

Economic calendar on Investing.com
Economic calendar on Investing.com

You can see at a glance when which news comes out and on which asset it has an impact. I take the Forex market as an example. But you can also find a calendar with earnings releases that affect stocks for example.

The number of bull heads (1, 2 or 3) indicates how big the impact is. Three bull heads has the most impact. ForexFactory uses colors. Red being the highest impact.

In the last 3 columns you see Actual, Forecast and Previous . Previous is the number of the last news release. Forecast is what analysts expect. And when the news is actually published, the new number will appear in the Actual column .

The rules are generally:

  • Actual LOWER than Forecast = Bad for the currency it impacts
  • Actual HIGHER than Forecast = Good for the currency it impacts

I will come back to this in detail later when I explain the trading strategy.

What is Non-Farm Payroll?

One of the most important news that’s published every month is the Non-Farm Payrolls (NFP).

This is a monthly report with numbers on employment in the United States. Non-Farm means that all numbers have been included, except those from the agricultural sector and they are the numbers for the previous month.

Why is NFP so important?

The Non-Farm Payrolls are actually a measurement of how the economy is doing in the USA. The most important parts of this monthly report tell us how many new jobs have been added and how many unemployment benefits have been applied for.

The more jobs the better the economy is doing and the more unemployed, the worse it is for a country.

Sounds logical right?

When are the Non-Farm Payroll numbers released?

The NFP report comes out every first Friday of the month at 8:30 EST. It is published by the US Department of Labor. All numbers are available at the same time. So everyone sees the same numbers at the same time.

Example of the Non-Farm Payrolls number release
Example of the Non-Farm Payrolls number release

I repeat the general rule:

  • Actual LOWER than Forecast = Bad for the currency it impacts
  • Actual HIGHER than Forecast = Good for the currency it impacts

In the example above you see three numbers:

  • Current: 164K
  • Forecast: 189K
  • Previous: 135K

These are the number of jobs and before the news comes out you will only see the Previous and Forecast. As soon as the news comes out, we see that the Actual (164K) is lower than the Forecast (189K). This is bad for the US Dollar.

Now you know what news to pay attention to and what the general rules are, so…

Time for the Non-Farm Payrolls strategy! 🙂

Non-Farm Payroll breakout strategy

With this Nonfarm Payroll strategy you mark the range in which the EURUSD currency pair is located before the news comes out. So the swing high and the swing low.

EURUSD marked the top and bottom of the range before the news
EURUSD marked the top and bottom of the range before the news

Above I have marked the swing high and the swing low with a yellow horizontal line. We are now waiting for the Non-farm Payroll news at  8:30 EST (timezone in the screenshot is Dutch +6). I have covered the next candles with a white square, because of course we can’t look into the future. 😉

Okay, it’s now 8:30 (14:30 in Holland), the news is released and we check our economic calendar for the result…

Non-Farm Payroll news release

Boom! Far fewer jobs have been added than expected. Last month it was 270K, the expectation was 185K and the reality is only 134K. This is super bad news for the US economy and therefore bad for the US Dollar.

The other important news is the Unemployment Rate. This is better than expected, but is really minimal. Only 0.1%.

Time to trade!

So all in all bad for the US Dollar, which means that it will drop in value against the Euro. We want to buy the EURUSD currency pair and go long.

 Entry on EURUSD: buy!
Entry on EURUSD: buy!

Place your buy order just above the swing high or buy manually. Note that you have to be fast because price will respond immediately. So buy on the green line that you see above.

Now let’s see what price does based on this news…

 First reaction after the NFP news
First reaction after the NFP news

Wow! Price spikes up and down as the first reaction to the news. It hits both the swing and the swing low. We bought and went long, so the next candle has to go up!

I now remove the white area so that you can see what happened next…

Nonfarm Payrolls profit!
Nonfarm Payrolls profit!

How do you know where to get out?

With this monthly earnings investing strategy you also need to know when to take a profit. In my free online trading course I will tell you more about when to get in and out , but in this example I grabbed my profit just below 1.1550. This is what they call a “round number” and is psychologically a level at which people will take a profit. So if you take profit just below it, you’re usually okay.

But you can also use a support and resistance level as a target.

Tips for this NFP trading strategy

As you can see, this way of banking monthly profits is not that difficul. In fact there are people who only trade once a month and you guessed it, they only play the Non-farm Payrolls.

Below a few tips for this trading strategy:

  • Make sure you have everything ready for when the news comes out
  • Mark your swings in advance
  • If necessary, open 2 windows next to each other so that you can respond quickly or use your phone as an extra screen
  • Wait for the news and execute your trade as soon as possible
  • Don’t be shocked by the first wild movement
  • Take profit at a pre-selected level

You can also trade this strategy on smaller time frames such as 1 or 5 minutes, for an even more aggressive entry.

Practice this strategy on a demo account the next time NFP is released:

Get your free BDSwiss demo account…

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Don’t forget to share and feel free to ask your questions about trading the NFP below.

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