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Tag Archives: USD Weakness
Today in forex trading the USD (US Dollar) was weak on all pairs, see the live trading signals below from The Forex Heatmap®. The EUR and NZD strength that was also in the market drove the NZD/USD and EUR/USD higher. The EUR/USD is likely going to continue higher to the 1.1050 resistance area on the H4 time frame. The NZD/USD also moved higher on the H4 time frame but we cannot tell if it has further upside potential. On the NZD/USD traders should consider scaling out lots on any profitable trades. The Forex Heatmap® provides live trading signals for the USD pairs, but it also provides signals for a total of eight groups of currencies and 28 pairs total. It is a live indicator that assists with trade entry management with the easy to read signals and arrows.
In this article we will give you a set of instructions for how to profitably trade currencies after the non farm payroll news announcement with specific tools, indicators, and techniques. We will show any forex trader how to enter trades in a window of time after the non farm payroll news announcement. Most forex traders believe and/or are told that you should not trade non farm payroll news. This is not true at all, this article will detail and show traders how to profitably trade non farm payroll, after the news comes out, and give you a time line of how and when to enter trades and under what conditions.
What is Non Farm Payroll
Non farm payroll news is reported each month by the US Bureau of Labor Statistics. The news announcement gives out the number of paid US workers of any business, but excludes government employees, farm employees and non-profit organization employees. Volatility statistics indicate that the non farm payroll news announcement is the most volatile of all scheduled US Dollar economic news drivers. The average movement of currency pairs is higher than any other news driver, so this is why traders are interested in trading to take advantage of this.
What to Look for After Non Farm Payroll
The best thing to do is to wait until after the NFP news announcement at least 10-15 minutes for the initial price spikes to settle down. Then start to monitor the trading tools and charts we show you in this article and in the example below. In some cases the tools and indicators may show you a good trade entry point ahead of the NFP announcement, in this case you must have your stops at break even prices on any open trades ahead of the NFP news announcement, or exit the trade manually ahead of the news.
Any trades you make after non farm payroll news would have the same characteristics as you would have in any good trade, the rules for forex trade entries are exactly the same. The only scenario you must be careful about is if a pairs gaps up or moves up suddenly 100 pips or more in the first few minutes after the NFP news announcement, this is when an entry can become much riskier.
Most traders expect movement from the USD pairs after non farm payroll, this is logical since it is a news announcement related to the US economy. The example below shows that you can look for trades on any USD pair, however with this trading system you can look for trades on any of the 28 pairs we follow in the eight major currency groups. So this is yet another myth we are breaking about trading after NFP. In the example below the US Dollar (USD) was weak and the Japanese Yen (JPY) has some strength, so the USD/JPY pair move strong after the NFP news driver. Using the same logic, any one of 28 pairs can be traded after NFP, even non USD pairs.
Traders sometime look at the NFP predictions and results to try to trade from this information, we do not think that this is the correct approach. Just wait for the news to come out, then wait for the price spikes to settle down. At that point you should trust your tools and indicators presented in this article, because they are highly logical and work well in almost every situation. Demo trading NFP will prove your system.
Example Post NFP Trade
On June 3, 2016 here is how trading unfolded, after the NFP news announcement, about 15-20 minutes later, the 107.80 support area was broken on the USD/JPY. This pair continued down to an intra-day low of 106.60, so 120 pips was possible. This pair closed the day at 106.62. This pair was getting close to support on the H4 time frame, but in many cases we have seen on trending pairs, post NFP movements can be used to enter strong trends with considerable additional pip potential. See the images below of the USD/JPY post NFP news sell signal and chart movement with breakout point.
The indicators you see above includes The Forex Heatmap®, which gives live buy and sell signals for 28 pairs in real time, even after strong forex news drivers like NFP. The chart setup you see is some very simple exponential moving averages combined with support and resistance levels. The heatmap is indicating clear USD weakness in real time and the trend indicators are showing the trend and support and resistance levels.
The USD/JPY sell was not the only trade available after NFP. The EUR/USD also gave a buy signal after NFP, it also broke out and into a trend in the D1 time frame. This also served as an entry point into a trend with additional upside potential. So the EUR/USD moved up on the same USD weakness and this pair is in an uptrend that should continue much higher on a larger time frame based on support and resistance analysis. So you could have also caught a buy entry on this pair as well while maintaining significant pip potential going forward. Another great trading opportunity after NFP on the same day.
After selling the USD/JPY we would advise scaling out lots, or closing out half of your lots on that sell position. Then let the additional lots ride the trend. Similarly on the EUR/USD buy position, you could scale out profitable lots, then ride the new D1 time frame uptrend higher with a break even stop in place.
Concusions about Non Farm Payroll trading – It is certainly possible to trade the non farm payroll news, just after the NFP news announcement, and this type of trading is certainly possible for any one of 28 pairs, not just the USD pairs. You just need the right trading system that is flexible enough to give you accurate entry signals with very low risk, under these market conditions. This article gives exact instructions on how to trade non farm payroll profitably, after the news announcement, and also shows you the trend and entry indicators used. If anyone tells you not to trade non farm payroll they are simply mistaken, or the trading system they are using is inadequate or not flexible enough for all market conditions. These same trading techniques and real time indicators also work after all of the volatile news drivers on the world economic calendar across 8 different currencies we track daily.
In this article we will examine the various US Dollar news drivers, and how these economic news announcements impact currency traders on a day to day basis. We will also discuss several techniques for profitably trading these US Dollar news drivers.
There are various economic news events that drive movement on the US Dollar against other currencies. Currency traders watch these news drivers, looking for opportunities to buy or sell the major currency pairs for short term profits, swing trades, or longer term trend trading. See the example below of the world economic news calendar showing some scheduled US Dollar news releases. Some examples of the US Dollar news drivers include Purchasing Managers Index, Unemployment Claims, Crude Oil Supplies, Non Farm Payrolls, and many others.
Volatility and price movement in the forex market can be expected after most of the scheduled US Dollar news announcements. Some US Dollar news announcements like the Federal Funds Rate, Non Farm payrolls or the FOMC Statement can provide substantial volatility and price movement. Volatile US Dollar news announcements occur between 25 and 30 times per month, not to mention all of the volatile news announcements from the other seven currencies we trade. There are plenty of times throughout the month when traders should be watching the market around these US Dollar news announcements. The top 7 major currency pairs that can be traded that are influenced by US Dollar news include the USD/JPY, AUD/USD, NZD/USD, USD/CAD, EUR/USD, USD/CHF, and GBP/USD.
Example US Dollar News Announcement:
On Friday March 6, 2015, the non farm payrolls US Dollar news was announced, like it always is on the first Friday of every month. Non farm payrolls is a monthly statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics. Total non farm payrolls rose by 295,000 jobs for the prior month in February, shattering expectations for 235,000, resulting in the US Dollar strengthening. The employment situation report indicated that the February unemployment rate had fallen to 5.5%, down from January’s 5.7%.
How The US Dollar News Impacted Traders
After the non farm payrolls news driver the US Dollar (USD) strengthened on all pairs. Traders could have profited from the price movements that happened after the non farm payrolls news drivers, if they have access to real time professional tools. Check out the live indicator below, this is called The Forex Heatmap®. The heatmap can tell you in real time what pair to trade, and in which direction. It works for 28 pairs, including all 7 of the US Dollar pairs. After the NFP news the heatmap indicated USD strength in real time. The arrow system pointed traders to the USD/CHF for a buy and the NZD/USD for a sell.
The readings on the heatmap tell you how far these pairs moved. A 1.6% movement on the NZD/USD is about 115 pips of movement, and a 1.12% movement on the USD/CHF is about 110 pips. The entire group of USD pairs moved hundreds of pips total.
From the standpoint of the trends of the market, the NZD/USD drop was in the direction of the long term downtrend on this pair. This pair should continue down to the 0.7225 support level and likely continue lower. So any sell trade on this pair would have resulted in an intraday profit, but also ongoing pip potential in the direction of the trend. Traders can use the heatmap to make informed buy or sell decisions on a day to day basis for trades in the direction of the trend, or possibly short term trades (day trades) against the trend. We have a great article that discusses trading non farm payrolls in more detail for further reading on this subject.
All US Dollar news events on the world economic news calendar are of great importance to traders. The same thing goes for news events from all of the currencies we trade. Making pips is possible from any of these economic news announcements with our trading tools and live indicators. If the US Dollar has a series of economic news showing that the economy is strong in the USA, and inflation is heating up, the US Dollar could start to strengthen against other currencies as the Federal Reserve starts to raise interest rates. Then, long term trends could form on pairs like the USD/CHF and USD/JPY. As trend followers we find this information to be vital.
Unscheduled US Dollar News
The economic news calendar shown above will give traders access to scheduled US Dollar news drivers, along with news drivers from all 8 currencies that we trade. Sometimes world political events, natural disasters, government of central bank actions, etc., can cause strong movement in the currency markets. We recommend using audible forex price alerts to supplement the scheduled news drivers for better monitoring of the 28 pairs we follow. Finding strong movements and breakouts gets easier with multiple alert systems.
Conclusions – Currency traders like the US Dollar and the major pairs for trading, knowing how strong the dollar is in real time, is extremely valuable to them. Live indicators like the heatmap are strongly favored by traders for increasing trading accuracy on the US Dollar pairs. If traders would analyze all 7 major US Dollar pairs daily, they could easily determine if the US Dollar is strong or weak with simple trend indicators. This would lead traders to being able to perform a daily US Dollar forecast. We analyze the US Dollar daily at Forexearlywarning, along with 7 other currencies. We also prepare a forecast for the US Dollar every day.
Today in forex trading The Forex Heatmap® signaled USD (US Dollar) weakness on all pairs. This drove strong price movement for traders. The GBP/USD moved up and broke one resistance level, this pair could continue higher to 1.5550 on the D1 time frame. The NZD/USD is close to breaking one resistance level at 0.7475, past there it would have additional short term potential to the upside. The heatmap provides live trading signals for 28 pairs, including the USD and a total of 8 currencies.
Today in forex trading the major pairs (USD pairs) had good price movement. The (US Dollar) USD was mostly weak and the Japanese Yen (JPY) was mostly strong. Therefore the USD/JPY dropped. This pair could continue lower for another day on the H4 time frame but the overall trend remains up on the higher time frames, so if you sold this pair you would scale out lots. The images below show the USD/JPY and the other major pairs on The Forex Heatmap®, which provides real time buy and sell signals for 28 pairs.
Today in forex trading the major pairs all moved on US Dollar (USD) weakness. There was also some minor Euro (EUR) and New Zealand Dollar (NZD) strength in the market. This drove price movement on the EUR/USD and NZD/USD as they both moved higher. These two pairs could continue higher for one or two days but they have no trend support from the larger time frames. If you bought either one of these two pairs we would scale out some lots and take profit, scale out additional lots as they continue to rise. The strength and weakness indicators you see below is The Forex Heatmap®, which works for the 7 major pairs listed below plus 21 other exotic pairs for live trading signals.
Today in forex trading The Forex Heatmap® signaled a buy on the NZD/USD. The USD (US Dollar) was weak on all pairs and there was some minor NZD (New Zealand Dollar) strength in the market. This pair is trending higher on the largest time frames and has broken most resistance levels, so it is a hold. The NZD/USD could be headed for historical highs.
Today in forex trading the USD (US Dollar) was weak on all pairs, driving price movement and trading opportunities. There was also some JPY (Japanese Yen) strength in the market, so the USD/JPY dropped strong to the downside. This pair is approaching a support level so we would consider scaling out lots and managing and profit. The GBP/USD also rose and this pair is inside of several resistance levels, and once again we would exit the trade or scale out most of your lots traded. The trading signals you see below are from The Forex Heatmap®, a real time visual map of the spot forex.
Today in the main trading session the USD (US Dollar) was weak on all pairs. The USD weakness caused pairs like the GBP/USD to move up. This pair should continue higher to the target price level indicated in our trading plans. The AUD/USD also moved higher, this pair is trending up on the larger time frames, so it has ongoing upaide potential. We will look to pan more buys on the AUD/USD going forward. The trade signals below are showing USD weakness and entry signals are on The Forex Heatmap®, which detects strength and weakness in eight different currencies for trade entry verification
The heatmap is a live tool which can be used to enter trades on pairs that are trending or ranging. It works for 28 pairs, so week after week forex traders can make significant pips and increase their trading accuracy significantly. Most forex indicators are complicated and ineffective, the heatmap signals simplify your trade entries, especially in the main forex trading session of after news drivers.
Anyone who wants to participate in a forex trading business should have a business plan. In this article we will show traders how to approach setting up a business plan for trading the forex market. Just like any other business startup, you have to have a business plan in writing, and follow it.
Advantages Of A Forex Trading Business
Traders can work their home trading business from home, work, or anywhere in the world with a good internet connection and work space. Forex traders can work while they travel or manage another business, as long as they are near the computer. You can trade part time on the side while full time employed. Traders can take a day off whenever they want if they are sick or need a break. If a trader is mobile, they can set up notifications on their phone or mobile device to notify them as to when the market is moving. Most forex website and brokers have mobile options and impressive apps..
Forex Trading Business Plan, Startup Costs
Here are some fixed costs associated with starting up a forex trading business. All traders will need a desktop computer or laptop, good quality phone or wireless device if you are mobile, internet connection, and funds for funding a live trading account. Most charting systems like Metatrader are free with your brokerage account.
There are some optional costs associated with a forex trading business. Fees for forex education courses are optional. To reduce or eliminate the cost associated with education, you can go to the Forexearlywarning website and all of our online forex courses are free, and these education courses are the best in the retail trading industry. This will save a forex trader a lot of money as education courses can range up to $50,000. Also, some charting systems have a monthly cost but the Metatrader platform is free and works just fine. Reduce costs of your forex trading business with these tips.
Another optional expense might be the cost for trading signal or alert services. These can range between $40 and $200 per month. Once again top quality trading plans and live signals are available from Forexearlywarning. Check out Forexearlywarning for only $19.95 per month. Forexearlywarning provides trend based trading plans, a complete and detailed trading system, and excellent tools for entering your trades. Doing this will keep your monthly operating cost very low. Keeping expenses low is good for all business startups, until you are trading profitably.
The final expense of a forex trading business is risk capital or working capital to fund a live trading account. This is not money paid out, but funds that a trader deposits into an account that you, as a trader, completely control There are a lot of misconceptions about funding a live trading account. Trading a leveraged market like the spot forex reduces the amount of working capital needed. With leverage of 50:1 and higher, traders can enter the forex market with live accounts funded in the $2000-$5000 range and have plenty of equity to reap good profits.
You should not fund a live trading account at all until after you demo trade. There are no costs associated with a demo trading account, so no risk to your capital. You should never fund a live trading account until your demo trades are successful. You may not need to fund an account at all if your demo trades don’t work out. Don’t take a chance trading live funds until your demo trades are successful. There are even some entities that will fund your trading account for you, if you successfully demo trade.
To protect your live account and working capital, make sure your broker is financially viable and maintains client account protections. After you successfully demo trade and get a live account funded, you can move forward with live account trading. Having a great trading system and implementing good money management procedures, trade after trade will make your live trading account and working capital grow.
Forex Trading Business Plan Checklist
Use this checklist of items for your trading business startup. Find a trading system you like, find a reputable broker, find a charting system you like, we suggest Metatrader to start. You can move on to more sophisticated charting systems and your experience level and personal tastes dictate. Find online forex trading courses to take, and make sure you are available to trade in the main forex trading session.
As part of your trading system, traders should have simple but powerful trading signals, like the one you see above. This is The Forex Heatmap® from Forexearlywarning. This system tells you what pair to trade and it works for 28 pairs. The example above is a sell signals on the GBP/JPY.
Skills Needed For A Trading Career
Here is a list of some of the basic skills a trader would need to consider a forex trading business. A trader would need to have knowledge of how to operate a personal computer or laptop, have basic typing skills, know how to download software programs from the internet, etc. They would also need to know how to set up Metatrader or other forex charting systems. They would also have to have the discipline to study the details of a trading system they are using, good reading comprehension, and the discipline to follow the trading system with demo trading.
Forex Trading Business Partners
Here are some business partners you might need as part of your forex trading business. A reputable forex broker, education provider (free or paid), signal and alert services, trading system provider that may also includes signals and alerts. It might also be a good idea to have a business partner and trade under a joint account. This might be a good idea if you have a full time job or live in a location where the main trading session and most trading is in the middle of the night.
Forex Trading Business Entity and Taxes
As a “trader” you may be able to deduct quite a few expenses, like your home office expenses. Understand the Internal Revenue Service definitions of “trader” versus “investor”. If you qualify as a trader, you can take the deductions. Self employed traders can file Schedule C. Income might be reported on Schedule D as capital gains. Traders can download annual trading data, with details of all trades, from their broker fairly easily. Traders might also consider trading under an entity like an LLC. These suggestions are for traders who reside in the USA. In all cases check with a tax advisor for guidance in the country that you reside in.
Conclusions About Forex Trading Business Plans – In this article we present as much information and ideas as possible for consideration to make your forex trading business startup successful. Use these ideas to think about how to improve your business plan on the way to forex trading success.