If you like to see the power of good support / resistance levels, then you have to like trading around NFP. Many traders dismiss it saying it is total gambling and do not participate at all. Well, of course it is high voltage event and if you can't determine your risk in trading then it is always wise to opt out. We like NFP because, 1.) Sometimes it gives very high risk reward setups. 2.) It provides very good opportunity to get into a well established trend at very favorable levels. There are no secrets tricks and formulas. Here is how we trade during NFP and so far it has been very profitable endeavor. - First of all take a look at the major USD pairs and check which one can give us a good risk reward set up. - Pick your levels ! Here it gets bit tricky. What you call 'good levels' ?! We usually take a look at 180 min, daily and weekly charts to come up with levels to trade against. - Never ever put more money on line than you are willing to lose on 25 / 30 pips of risk. Yes, just 25/30 pips, because in our experience, if a level is going to hold then MOST of the time it holds within a range of 30 pips. - As soon as you are in profit of 20/30 pips which you have risked initially. Take it partially and move the stop. These are the levels we are looking for trade today. EUR/USD - Short near 1.1300 AUD/USD - Long near 0.7050 7050 ( we have already got our 0.7210 long order filled from last trade idea, so let's see how that trade works out. Took partial profit at 0.7250 and may get out before NFP depending upon price action ) NZD/USD - Long Near 0.6750 / 0.6700 USD/JPY - Short Near 110.50 As you can see, these levels are too far than the current range. But you never know, NFP or such events can wreak havoc if it misses by huge number and that's where we get advantage over algos ;) Ok, here is the final point. If not filled, never chase it !
Hello, allow me a naive question, what do you mean short USDJPY near 110.5, when now the pair is at 108,75? thank for your answer in advance
BombayBulls
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During NFP release, there could be some big moves. If USDJPY goes up near that level, which looks like a good resistance, we will be looking to short it.
harilaos
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Fair enough, good answer, would you consider long it directly at say 108,75?
BombayBulls
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No, because current trend is down, so looking for short opportunities
harilaos
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Hello again, did it go through 110.5 and then down, did you succeed?
For me things were bad, any way I will keep away such volatile days in the future, unless I use not at market orders, like yours,… I think it make sense to catch a trend. I would appreciate your answer.