3 Tips for Trading the Non-Farm Payrolls with Forex

Non-farm payrolls are a data set which is released on the first Friday of every month, at a designated time. It is possibly the most important data release each and every month, and it can move the market massively depending on whether the figure comes in above or below the level that analysts expected.

Essentially, non-farm payrolls are a measure of employment. They show the change in the number of jobs in the economy. A positive figure means that more people were employed in the previous month than those who might have been layed off or made redundant. Alternatively, a negative number means that more people lost their jobs than new jobs were created. This figure has large implications for the economy as a whole.

So, given the market moving extent of this data release, how can you trade it successfully with Forex? Here are 3 tips to keep up your sleeve if you are trading around the release time.

Tip One: Markets Will Move Extremely Quickly

When the non-farm payroll numbers are released, traders on the floor at major exchanges are all watching the screen. Following the release, markets can move very quickly in one direction - to reflect the implications that the printed figure could have over the next month on the economy.

You can take advantage of this move by placing entry orders in either direction of the current price. Once a price spike occurs - you will then be able to profit as your trade is automatically filled and you will be able to exit once the market settles at the new level.

Tip Two: The Flip Flop

One thing to be very careful about when placing multiple entry orders on either side of the current price on the FX market is that when the non-farm payrolls are released, it is not uncommon for the price to move in both directions!

This is a function of many millions of dollars of currency changing hands in a very short amount of time. Take this in to account when planning your trades so that you do not get burnt by "out of control" FX currency movements.

Tip Three: Check Your Brokers Slippage Policy

Because of the speed of market changes around these highly volatile times, FX Brokers sometimes are unable to fill your entry orders at exactly the same price that you specified in the trade. If you are filled at a worse price, the difference is known as slippage.

Ensure that your FX broker has a tight slippage policy. There is nothing worse than getting on the right side of the trade, only to find that you have not profited because the FX broker was too slow to execute your order.