GSI Markets provides investors with the best platform to trade the US NFP report that will be released today. Learn more about to trade effectively.
The big day is finally here, as the US will release the Nonfarm Payrolls (NFP) report today at 1230hrs GMT. Released on the first Friday of every month, the NFP is one of the biggest economic events in the forex market. News of this nature can cause big and erratic price movements that can whipsaw traders. But trading the NFP on the GSI Markets platform can help traders to keep safe because the broker has an ECN connection and there is no risk of slippages or latency whatsoever. Nonetheless, GSI Markets traders still need to understand the components of the report and how to trade its release effectively.
The NFP Report
The NFP report generally shows how the labor market as well as the overall US economy is performing. It has three main components: the NFP numbers, the unemployment rate and the hourly wages. The NFP numbers show how many jobs have been created or lost. When the economy is doing well, more jobs will be created and vice versa. If the economy is doing well, companies will require more employees and this will reduce the unemployment rate. Meanwhile, the average hourly earnings will also determine the overall purchasing power of the public, and if it rises, the effects will trickle down to the whole economy.
Trading the Release of NFP Report
GSI Markets traders can trade the nonfarm payrolls using two main methods, depending on their risk appetite and profit objective. The first method is to place a trade immediately as the report is released and seek to capitalize on the initial movement. For instance, it is expected that 171,000 jobs were added in September. If the report reveals a higher number, a trader can place a long order on the USDJPY pair, with the expectation that the US dollar will strengthen further.
The second strategy involves News Reversal. When news such as NFP is released, traders usually react quickly to it, causing price to spikes that, in most cases, cannot be sustained. Traders can look out for key levels that may provide support or resistance for price and seek to fade the initial knee-jerk price movement. However, this strategy is inherently risky as prices may advance much further than a trader anticipated.
Today is a big day for the financial markets and traders who want to make money can track the NFP release at GSI Markets.