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Trading the NFP this friday

  • #21
  • Dec 7, 2006 12:31am Dec 7, 2006 12:31am
Quoting MoneyMa$ter
BK, merlin et al,

Maybe it's just me (or the Louis the Tray, another one of those +$250 dinners) but how can you have #1 and #9? Aren't they mutually exclusive?? Did you mean #1 OR #9??

Help a brotha on this one!!
Thanks for correcting the grammar.

In deed it should be "OR" but youse know this aint english class.
  • #22
  • Dec 7, 2006 1:04am Dec 7, 2006 1:04am
Quoting BurgerKing
There will be a retrace TRUE. but to which level?

Must you wait for the 1st minute's move to decide which is the FiB level? Or wait for 5 minutes?

Knowing at which level *is* the big GUESSING GAME.

This is why I trade half via Straddle and another half via Market Order.
I prefer entering 1-5 minutes after the initial spike when it has retraced to 38.2 or 50 or 61.8 and then starts heading in the other direction again. Sometimes of course it's not so simple because there's whipsawing and you have to either play it by ear or keep out. It always sounds so simple when you write it down but you're right it often is just a guessing game.
  • #23
  • Dec 7, 2006 1:33am Dec 7, 2006 1:33am
Geez Merlin where all those knowledge come from..ck ck ck. I love you.You know that




Quoting merlin
no i mean if NFP is good, dollar will rally, then after a while it will run into a brick wall of sellers. when it hits this wall, sell.


it's actually quite an interesting process how this works. in brief, there are a bunch of reporters sitting in a highly secured room somewhere in Washington DC. at 8:15am they are given the NFP report from the BLS. they sit in this room for 15 minutes and write a story about the report. then at 8:29 there is a countdown, 10, 9, 8, you get the picture. then at exactly 8:30 they are allowed to "transmit" their story to their respective news organization. the reporters work for companies such as bloomber, reuters etc etc. i know this sounds like a crazy process, but this is really how it's done.
  • #24
  • Dec 7, 2006 1:34am Dec 7, 2006 1:34am
I think it will be too late to wait that long time. In case BK scenario #1 or #9 happen, the pair will move without retracement and it will hurt you mostly. I think BK way to straddle the news is better. As soon as the pair jump on, you just need to move your initial SL to comfortable price, right ?!

I think, I will straddle the news +10 and -10, and SL -10 each. Soon the price jump, I will move the SL so that I'll be in all-winning-trade (above BEP).

What do you guys think about it? Please share your idea, and lets trade the NFP wisely...^^

I personally hope the #1 or #9 BK scenario will happen, and let us, traders, enjoy our Friday and prepare for Christmas, and New Year !!! ^^
(TGIF = Thanks God, It's Friday)
Hello World
  • #25
  • Edited 6:09am Dec 7, 2006 3:09am | Edited 6:09am
It's people like BK that make this the best forum i know! Really appreciate your time!
  • #26
  • Dec 7, 2006 6:07am Dec 7, 2006 6:07am
Yeah..BK is dedicated to this...^^

He is da man
Hello World
  • #27
  • Dec 7, 2006 7:16am Dec 7, 2006 7:16am
If you look on the charts there is almost always a retracement around the 1 or two minute mark. That's the time to get in but you can't hang around. Straddling would have got you killed the past couple of months because of the revisions.
  • #28
  • Dec 7, 2006 7:26am Dec 7, 2006 7:26am
Quoting notouch
If you look on the charts there is almost always a retracement around the 1 or two minute mark. That's the time to get in but you can't hang around. Straddling would have got you killed the past couple of months because of the revisions.
You certainly can get killed straddling. But, you can get killed around data with any strategy if you are no good at it. I won't go into specific details but the biggest mistake alot of guys make withtheir straddle is that they cancel the opposing order when the first order is stopped out. A little calm, objective experience and alot of chart research will show them the way.
Profit is where readiness meets Opportunity
  • #29
  • Dec 7, 2006 7:29am Dec 7, 2006 7:29am
Straddling + or - 10 pips is dangerous. Many people got burned because of,it if it wipsaws. There might be a huge spread difference that might fill you both ways. Better to get the numbers AND REVISIONS then make your game happen. But remember, small leverages.
  • #30
  • Dec 7, 2006 7:33am Dec 7, 2006 7:33am
Quoting hunter101
Straddling + or - 10 pips is dangerous. Many people got burned because of,it if it wipsaws. There might be a huge spread difference that might fill you both ways. Better to get the numbers AND REVISIONS then make your game happen. But remember, small leverages.
HINT:10 pip straddle with 10 pip stop is a bad plan. There is too much volatility to try to play that tight.

READ HISTORICAL CHARTS

BK does not do all of that work just for entertainment value.
Profit is where readiness meets Opportunity
  • #31
  • Dec 7, 2006 8:44am Dec 7, 2006 8:44am
Can I ask what determines the Friday NFP is announced? I thought it was the 1st Friday of the month, but then why were March 3rd and December 1st of this year skipped?
  • #32
  • Dec 7, 2006 4:49pm Dec 7, 2006 4:49pm
What To Look For With the NFP:

The NFP is one of the most important and widely traded economic reports, but every report must be traded in the context of what has been happening in the market.

8:30am USD Nonfarm Employment Change Consensus: 75-125K median 100K Previous 92K


The dollar started to deflate on 10/25, when the EUR/USD was around 2600 and eventually rose to around 3350 on 12/3. There are several reasons for this and I will go over them at another time. What we want to do now is trade this number successfully, if possible.

The first thing to look at is the consensus number range and the median. Remember that generally, reports that come out as expected are not good to trade, so the first thing we need is a number outside the range.

Next, we need to know the trend along with some recent support and resistance levels. Obviously, the trend for the dollar has been weakness, but if you look at 12/3 until now (as I write this it's 12/7 @ 21.00 GMT), you'll see it's been within a band from around 3350 to 3250. The high price got rejected twice as did the low price, so i'm identifying these as my resistance and support levels. What does that tell me? The $ bear market is over for now. Only further strong fundamentals can push the Euro higher.

Next, let's look at what I feel are recent important important fundamentals and i'll discuss them separately.

US manufacturing ISM was down ($-). The market expected it to be down and it was lower then consensus. This component makes up around 20% of the economy.

US sevices ISM was up nicely ($+). This component makes up around 80% of the economy. This was also expected to be down, but surprised to the upside. This report helped to end the $ bear market.

Trichet's news conference. This was not interpeted by the market as being Euro+, because the Euro would have risen at least to the resistance level if the market had seen it otherwise and that never happened. The highest it got to was around 3320. Why didn't it go down then? The market was waiting for the NFP. So where do we stand now?

Trichet's conference was the fundamental that has pushed the Euro to the edge of the cliff. All it needs now is that last inch or two to go over. Will that happen? It all depends on the NFP.


Before considering a trade, you must listen for the revision to the prior month. If the revision doesn't match the direction of this month's number, I wouldn't trade it.The absolute safest thing is to wait a few minutes for support or resistance to get broken and not get in right away.


If the NFP surprises strong (150K or better) and the prior month is revised up, I would look for a break below 3250 before going short. If this gets broken, it will tell me the market is convinced (for the time being) the US economy is too strong for a rate cut. Watch treasuries also, especially the 10 yr note, as that often leads currency. If the NFP surprises weak (below 75K) and the prior month is revised down wait for a break above 3350 before going long and it better get there convincingly. I would be very careful here.

Here are the trades from best to worst:

1. An upward revision and the NFP stronger then consensus (over 150K) is the safest way to trade it and the best potential trade. There's alot more room for the Euro to go down then up.

2. NFP lower then consensus (below 75K) and the prior month is revised down. Still prettty good, just wait for 3350 and be careful with it.

3. NFP is in consensus and the revision is up (OK) or NFP in consensus and revision is down (less OK). Wait for support or resistance to break.

4. NFP is above consensus with no revision or below consensus with no revision.

Personally, I won't trade the other possibilities. That's my preference and my plan. Yours risk tolerance may be different. Maybe i'll miss a good opurtunity, maybe not. Good luck.

NewstraderFX
  • #33
  • Dec 7, 2006 8:52pm Dec 7, 2006 8:52pm
Quoting NewstraderFX
What To Look For With the NFP:

The NFP is one of the most important and widely traded economic reports, but every report must be traded in the context of what has been happening in the market.

8:30am USD Nonfarm Employment Change Consensus: 75-125K median 100K Previous 92K


The dollar started to deflate on 10/25, when the EUR/USD was around 2600 and eventually rose to around 3350 on 12/3. There are several reasons for this and I will go over them at another time. What we want to do now is trade this number successfully, if possible.

The first thing to look at is the consensus number range and the median. Remember that generally, reports that come out as expected are not good to trade, so the first thing we need is a number outside the range.

Next, we need to know the trend along with some recent support and resistance levels. Obviously, the trend for the dollar has been weakness, but if you look at 12/3 until now (as I write this it's 12/7 @ 21.00 GMT), you'll see it's been within a band from around 3350 to 3250. The high price got rejected twice as did the low price, so i'm identifying these as my resistance and support levels. What does that tell me? The $ bear market is over for now. Only further strong fundamentals can push the Euro higher.

Next, let's look at what I feel are recent important important fundamentals and i'll discuss them separately.

US manufacturing ISM was down ($-). The market expected it to be down and it was lower then consensus. This component makes up around 20% of the economy.

US sevices ISM was up nicely ($+). This component makes up around 80% of the economy. This was also expected to be down, but surprised to the upside. This report helped to end the $ bear market.

Trichet's news conference. This was not interpeted by the market as being Euro+, because the Euro would have risen at least to the resistance level if the market had seen it otherwise and that never happened. The highest it got to was around 3320. Why didn't it go down then? The market was waiting for the NFP. So where do we stand now?

Trichet's conference was the fundamental that has pushed the Euro to the edge of the cliff. All it needs now is that last inch or two to go over. Will that happen? It all depends on the NFP.


Before considering a trade, you must listen for the revision to the prior month. If the revision doesn't match the direction of this month's number, I wouldn't trade it.The absolute safest thing is to wait a few minutes for support or resistance to get broken and not get in right away.


If the NFP surprises strong (150K or better) and the prior month is revised up, I would look for a break below 3250 before going short. If this gets broken, it will tell me the market is convinced (for the time being) the US economy is too strong for a rate cut. Watch treasuries also, especially the 10 yr note, as that often leads currency. If the NFP surprises weak (below 75K) and the prior month is revised down wait for a break above 3350 before going long and it better get there convincingly. I would be very careful here.

Here are the trades from best to worst:

1. An upward revision and the NFP stronger then consensus (over 150K) is the safest way to trade it and the best potential trade. There's alot more room for the Euro to go down then up.

2. NFP lower then consensus (below 75K) and the prior month is revised down. Still prettty good, just wait for 3350 and be careful with it.

3. NFP is in consensus and the revision is up (OK) or NFP in consensus and revision is down (less OK). Wait for support or resistance to break.

4. NFP is above consensus with no revision or below consensus with no revision.

Personally, I won't trade the other possibilities. That's my preference and my plan. Yours risk tolerance may be different. Maybe i'll miss a good opurtunity, maybe not. Good luck.

NewstraderFX
Very well thought out News.

Sounds like a plan. Think Fast!
Profit is where readiness meets Opportunity
  • #34
  • Dec 7, 2006 10:10pm Dec 7, 2006 10:10pm
Thanks FX-I guess my point is to at least have a plan and stick with it. Try to preserve some capitol. If what I said helps someone not lose money, I'm happy. Trading is hard enough as it is...

The only way to beat the market is by knowing what the majority is thinking. I'm not sayin I can know that at all times, but let me pose this question to anyone who's reading this:

We all know the Euro and GBP are high. I'd bet that alot of people are thinkin "hey, this has to turn around and start goin down at some point"...IMHO I think alot of people are thinking this, but no one knows for sure exactly when it's gonna happen. Agree or disagree?

That's all that I'm makin a bet on, that alot of people are thinkin the same thing and they're waiting for the signal. The strong non-man ISM braked it, Trichet pushed harder on the brake and a strong NFP might throw it into reverse. That could be the tipping point that I think people are looking for. All we need for a potentially great trade is a nice strong number and a nice strong revision. I'm not sayin that's gonna happen, but if it does...
  • #35
  • Dec 7, 2006 10:31pm Dec 7, 2006 10:31pm
Trichet signal euro negative by his statements. But still, some other (may be not cereberally challenged ) people keep buying euro. I don't understand the movement of the EUR/USD. efxnews signal euro should be shortened also. But, still some people buying it. I think they will regret it ^^
I short eur/usd currently, and still waiting for progress.

Pound has shown many correction (perhaps) to be ready for NFP. I think, if we base on the ADP data, many people will start buying dollar speculatively.
Look for dollar to be a little bit stronger before NFP, and if the news is good, dollar rebound continue
Hello World
  • #36
  • Dec 8, 2006 12:20am Dec 8, 2006 12:20am
Quoting NewstraderFX
We all know the Euro and GBP are high. I'd bet that alot of people are thinkin "hey, this has to turn around and start goin down at some point"...IMHO I think alot of people are thinking this, but no one knows for sure exactly when it's gonna happen. Agree or disagree?
I was thinking this way last week and paid dearly for it.

Quote
All we need for a potentially great trade is a nice strong number and a nice strong revision. I'm not sayin that's gonna happen, but if it does...

I am counting only on two possible scenarios:
Good Number + Upward Revision
or
Bad Number + Downward Revision


As I promised, I searched for data to show how NFP is doing on yearends.
This is what I got - it does not seem to support Strong Numbers on Yearends; its totally random!

So I am not going to bet anything pre-release time.

I'd Straddle + a market order 30 seconds after the news (giving me time to analyze what the data means.)
Attached Image
  • #37
  • Dec 8, 2006 12:54am Dec 8, 2006 12:54am
I'm supporting you BK, as I know...many countries buying dollar to pay their debts, and in the employment side, I think, many business employers will hire many employees in order to give reliable services in the christmas and new year.. I think this will support the dollar
Hello World
  • #38
  • Dec 8, 2006 3:46am Dec 8, 2006 3:46am
with yesterday EBC hike & trichet speetch an expected NFP going to make usd little bearish.
-With NFP over 125k and 4.5 unemployement us little bullish if over 125K and 4.4 unemployment usd strong bull
-with NFP under 100k and 4.4 unemployment USD little bearish if under 100k and 4.5 usd strong bearish

-SURPRISE strong NFP over 150k and 4.4-4.3 unemployment
-SURPRISE bearish NFP under 92K and 4.5-4.6 unemployment



If G/U break 1.9580...see it at 1.9520/50

MAX G/U range 1.9450 -1.9760

I predict little BULLISH NFP!
  • #39
  • Dec 8, 2006 4:40am Dec 8, 2006 4:40am
Yap Bullish on USD.I had open position on 1.9684 from last night trade.hmm but i'm not really convince about this nfp.right now the price 1.9585-1.9600 as I type.I really expect the gbp going down.but is it worth wo risk my 95 pips on this news? confuse.this is the most annoying news so far in this year.last fomc i did make a good news trade.but this one really stake my discipline.huaaaaaaaaaaaa.with a few days to holiday, cant stand if i'm going to lose this profit.Dohhh.

Quoting sf2000
with yesterday EBC hike & trichet speetch an expected NFP going to make usd little bearish.
-With NFP over 125k and 4.5 unemployement us little bullish if over 125K and 4.4 unemployment usd strong bull
-with NFP under 100k and 4.4 unemployment USD little bearish if under 100k and 4.5 usd strong bearish

-SURPRISE strong NFP over 150k and 4.4-4.3 unemployment
-SURPRISE bearish NFP under 92K and 4.5-4.6 unemployment



If G/U break 1.9580...see it at 1.9520/50

MAX G/U range 1.9450 -1.9760

I predict little BULLISH NFP!
  • #40
  • Dec 8, 2006 5:05am Dec 8, 2006 5:05am
Be on your way.. Yesterday, I read efxnews about numbers of tv shows due out today. Some people say that it is a sign of strong NFP number but the editor has his / her own thought about it. What do you guys think about it ?
Hello World
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