Since being one step ahead of the market is one of the best Forex strategies, we will now delve into NFPs and why they are so important for traders.
What Is The Non-Farm Payrolls Report?
It’s one of the economic indicators released by the US. It represents how many jobs have been added outside of farming, government, private household, and non-profit organisations.
The NFP report is released monthly and is one of the most closely watched economic indicators for estimating the current state of the US economy. It is prepared and published by the Bureau of Labor Statistics.
How Non-Farm Payrolls Affects Forex?
As previously stated, the NFP is one of the favourite indicators for the development of the US on the economic side. Thus, it also sheds light into the real value of the USD and possible movements in the exchange rate.
The Fed greatly values the NFP releases as well, and thus, this data significantly affects the measures and policies taken by the US central bank. When there’s high unemployment - for example - the Fed tends to adopt expansionary policies with the aim of increasing economic output.
Therefore, if the NFP shows high unemployment, policymakers will attempt to boost it to run according to its potential. This translates into lower interest rates, which reduces USD demand in the market.
To simplify things, the Non-Farm Payrolls is one of the best US indicators, for it allows the best insight into the real economic development of the country.
Which Pairs Are More Sensitive To The NFP?
USD pairs are the most affected in the Forex market, reasonably, as Dollar demand and supply for the currency is affected by the release of Non-Farm Payrolls jobs data.
It’s worth noting, however, some currency pairs tend to gain more volatility than others depending on their global financial status. For example, USD/JPY has is seen as one of the “safe havens” for investors, hence when the USD plummets and investors dump risk assets in times of risk aversion, the volatility on the USD/JPY pair rises significantly.
When Is The NFP Released?
It’s released on the first Friday of each month at 8:30 AM ET, and any trader can find it on the website of the Bureau of Labor Statistics.
Similarly, the first weekend of each month sees many analyses coming out as a result of data releases, and it’s a good time to do some planning.
Tips For Trading NFP Releases
This article will focus on the effects of QT, but, in a nutshell, QE sets to encourage higher economy output by having interest rates close to zero while injecting money into the economy by purchasing different financial instruments. QT, by definition, is the opposite of that – removing money from the economy through similar measures.
Quantitative Easing, or QE for short, has been frequently talked about in recent history. Introduced as a way to incentivize economic stability and growth after the 2008 financial crisis, QE has become the centerpiece of most major central banks in the world
The effect of Quantitative Easing on the currency’s value is negative (currency depreciates). The logic is simple - more quantity of the currency by definition weakens that currency - more supply leads to lower prices.
Nowadays, GDP calculations can vary from nation to nation. There is no single formula to be used when trying to assess the economic health of a nation. However, the most widely accepted way to measure GDP by economists is the so-called expenditure approach. This system calculates the value of Y (GDP), by adding total consumption (C), investment (I), government spending (G), and net exports (NX) which are total imports minus total exports.
The final equation looks like this: Y= C+I+G+NX
The go-to platform for anyone interested in trading forex, there is no equal for this fantastic platform. MT4, as it is commonly known, comes with several features and capabilities that will help novice and experienced traders alike.
The main interface in MT4 gives traders access to all the technical tools they need to a proper and efficient technical analysis. Moreover, these tools can be used in real-time, which means traders can make quick decisions based on accurate information.
Traders can open demo accounts to test their skills. But, if they are ready to trade, the platform can be download for free at the developer's site.
When it comes to economic news, there are critical events any trader must track if they wish to do a highly reliable fundamental analysis.
However, there is a stronger case as to why CPI should be mandatory when looking at forex fundamentals.
Financial instruments are expensive, and companies will always find a way to pass that burden onto their consumers. It is this balance between how much a trader will make and how much it will cost them completing said transaction that determines profitability.
Obviously, there are different costs that any given trader might incur. But, when it comes to forex trading, the main one will always be the bid-ask spread. And when talking about the bid-ask spread, there are only two options to choose from: fixed or variable. Neither option looks better than the other at first look. After all, both have their own and highly distinct advantages and disadvantages.
Now, if a trader chooses to look at the fundamentals of a Forex pair, a very important data point is certainly the Purchasing Managers Index – known as the PMI. And understanding what it is, how it works and its importance in Forex trading can be paramount for anyone who wants to be a successful Forex trader.
But, what is it when it comes to Forex trading?
That’s what we’ll find out in this article. So, grab a drink and read on!
Due to its growing popularity among ECN brokers, many traders will need to familiarise themselves with cTrader, and this article will help you do just that.
It has led many to believe Forex to be a scam, but the truth is that profit equals work, and success stories are not unheard. You will find some of them below.
The following article should give you a good idea on how the Forex ecosystem functions and the general steps to take if you want to invest in it.
Those advantages along with its high liquidity make trading forex a very lucrative business. Unfortunately, that also means there is an incentive from bad agents to scam those who are seeking for a better life. And while, historically, forex has not been regulated, things are getting better.
However, they also bolster close to 10,000 companies that stream from all walks of life. And that leads to the first big difference.
And if all these strategies sound foreign to you, do not fret. There is plenty of time to learn them as well. However, this article will focus on another forex trading strategy you might not be familiar, transition trading.
As volatility makes or breaks your chances to trade, and it can be tricky to master it (no, you don’t want to avoid it all the time), we’ve prepared this guide on some of the most popular currencies and their volatility.
Trading Forex is seen as a dream job for more than one person on the internet. In fact, it’s one of the most sought-after careers today, especially when it comes to online jobs, but it’s also among the ones that require the most sacrifices, skill, and discipline to master.
However, there are many ways to take when it comes to your money’s well being. Regulatory bodies play a huge part in Forex trading and the safety of each investor, and one of the ways they ensure this is with investor compensation schemes.
Since it is of your best interest to keep your investment secure, you are about to learn all you need about them.
So, there are different types of technical charts with different purposes, such as tic or tick charts, line charts, bar charts, and charts of points and figures.
On this occasion, we will discuss what is a Tick chart, what makes it different from the other types of charts, how they operate, and what their advantages and disadvantages are compared to other technical indicators.
Thus, there are different types of technical indicators with different results in practice. In this occasion, we will show you the repainting indicators and the non-repainting indicators, their differences and which of them has a better chance of helping you to guess in a prediction.
In the Forex world, there are many resources to read and learn from, but for many, it seems that is an overlooked or avoided area.
Traders expect to find the best Forex trading book, which wouldn’t be a bad idea, one book that provides everything you need such as strategies, ideas, or what should you focus on in Forex trading.
Trading requires talent - it isn’t just numbers, charts, ratios, and patterns - but more than talent, trading will require skills which will grow on with enough practice, discipline and continued education that will lead you only forward in your Forex trading journey.
Today, we are going to discuss some core principles of Forex Trading that will help you how to get going in this business.
First, let’s see some commonly-used words in trading:
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