Reading NFP News Directions, How to Entry Before News

NFP stands for Non-farm payrolls, which shows the level of US employment in the non-farm sector, or in other words, NFP represents the number of workers in a month, but does not include employment from the agricultural sector, government, households, and institutions non-profit. The NFP is one of the most important indicators in the United States economy, and the one most awaited by all traders around the world.

The NFP is released monthly and represents data for the previous month. NFPs always have an impact on the market, so they are often volatile, and because their releases affect the USD exchange rate, traders are always on the lookout for their release.

Tips for Trading with NFP

NFP greatly affects the USD exchange rate. Over the long term, keep an eye on major currency pairs involving the USD, particularly EUR/USD, GBP/USD and USD/JPY. The most important thing to consider when trading NFPs is patience in watching the market to plan for new information, without rushing into action until it is time to follow the trend. The period of greatest volatility is the first 30 minutes after release, although the impact can still last for 2 hours.

Keep an eye on technical indicators and their triggers. Keep in mind that the market conditions often change at these moments, so it is worth watching the trend carefully and trading according to the market atmosphere, because changes always have the potential to occur at certain points. To ensure the safety of traders' funds, it is best not to open orders right before their release. If a trader has previously opened an order, it is recommended to close it a few minutes before the NFP data is publicly announced.

NFP Effect

In general, reading the results of the NFP is not so difficult, the more the number of workers, the more stable the economic conditions of a country will be, and the more traders can earn, so overall consumer spending will increase. Logically, when conditions reverse, and people's income levels become lower, the economy will deteriorate. So, the NFP shows the possible direction of movement of the USD exchange rate. Simply put, if the reading is high, the USD is getting stronger. Conversely, if the reading is low, the USD is likely to weaken.

When the wage or payrolls figures match the predicted, the reaction in the market is nil. Usually, NFPs are released on the first Friday of each month, and the moments before and after release are important moments for NFP trading. Please note, along with the NFP, two other important indicators are also released, the average hourly earnings and the unemployment rate. Both of these indicators can cover a negative NFP result and support it under other conditions, if the average hourly earnings and unemployment rate are negative, then even the NFP result will be imperfect.

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