Strategy NFP for Trading Forex
As one of the popular events for news trading, there are various NFP (Non Farm Payroll) trades run by traders. Most people hide the strategy they use, but there are also some who publish it, so it can be a guide for other traders who don't have a powerful NFP trading strategy.
Trading during NFP is better to use charts on the M15 and M30 time frames, because there is a potential for volatility to shrink at the beginning. On the other hand, traders still have the opportunity to look for potential opportunities when market participants are considering whether traders want to sell or buy when the NFP has just been released. The trend that is most likely to occur after the initial spike is the trend trying to be achieved by setting up the NFP trading strategy. This strategy is usually used for the EUR/USD pair and also XAU/USD (GOLD), but not a few traders use this strategy for GBP/USD considering that the pair has a larger daily range than the EUR/USD pair, and traders say this strategy is far more potential.
NFP Trading Strategy Rules
1. Do nothing within 15 minutes of the NFP announcement. A large candle will appear on the chart between 8:30-8:45 AM EST, but traders should not pay attention to the candle.
2. Wait for the Inside Bar to appear. The Inside Bar here is a 15-minute candle where the High and Low levels are completely within the range of the previous candle.
3. The high and low levels in the Inside Bar will be the trigger in this NFP trading strategy. If the price increases above the high level on the inside bar, then a buy order. If the price falls below the low level on the inside bar, a sell order.
4. Place a stop loss at 30 pips from the initial position, or below the last low level if the trader places a buy order. However, the stop loss should not be more than 30 pips.
5. Exit position approximately 4 hours after entry or maximum at 2:00 PM EST. Once started, the trend usually lasts about 4 hours, so if a trader enters at 9:15 AM for example, then exits at 1:15 PM EST. However, by 2:00 PM EST, traders should have exited from this post-NFP trading position, because other factors will begin to affect price movements, while the influence of the NFP itself has already faded.
6. Do not make more than 2 trading positions post NFP. If the trader still gets a stop loss after 2 trading positions are opened based on this NFP trading strategy, it means that the price movement is too random (choppy). Save this tactic for the next Non Farm Payroll data release event, or other high-impact data publication.
7. The last step, the trader can also apply a trailing stop
or the like to prevent loss of profit if the trend suddenly reverses after a
trading position is opened. However, it is not mandatory. Trailing Stops are
only a complement to this NFP trading strategy. As the trend progresses, move
the stop loss to the last low level (if the trader opens a Long position) or
the last high level (if the trader opens a Short position).
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