Non Farm Payrolls (NFP) Simple Forex Trading Strategy

Trading one of the most volatile event risk in the currency market requires a sound strategy.

The Non-Farm Payroll is a major US data that gauges the employment situation and gets published the first Friday of every month at 08:30 am EST.

We have designed a simple, yet powerful Non-Farm Payroll forex strategy that’ll help traders profit from the biggest monthly NFP economic news event.

Learn how this strategy works below:

Chart Setup

MetaTrader4 Indicators: SMA-Crossover_Signal.ex4 (Input Variable modified; FasterSMA=12), sMAMA.ex4 (default setting), Pivot_AllLevels.ex4 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute

Recommended Trading Sessions: New York

Currency Pairs: EUR/USD, GBP/USD, USD/JPY

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Download the Non Farm Payrolls (NFP) Simple Forex Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy order if the following indicator or chart pattern gets displayed:

  1. Wait for the release of the NFP and wait after 15 minutes before any possible entry. Our initial sell entry was botched after price was driven higher to close above the support level turned resistance (refer to Fig. 1.0). We exited and waited for another trade confirmation.
  2. The next trade confirmation was bullish and we had the following trade confirmations:
  3. If price breaks above an immediate resistance level (dotted horizontal dark green line) of the Pivot_AllLevels.ex4 indicator, a buy order is said to be in progress.
  4. If the spring green upward pointing arrow of the SMA-Crossover_Signal.ex4 custom indicator forms below price bars, it is an indication of upward price pressures i.e. a buy signal.

iii. If the red line of the SMA-Crossover_Signal.ex4 custom indicator crosses its blue line bottom up and stays somewhat below price bars as seen on Fig. 1.0, a buy signal alert is said to be on.

Stop Loss for Buy Entry: Place stop loss 2 pips below immediate support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes center stage:

  1. If after breaking a resistance turned support, price dips lower to break such a support level of the Pivot_AllLevels.ex4 indicator, an exit or take profit is advised.
  2. If the red downward pointing arrow of the SMA-Crossover_Signal.ex4 custom indicator pops up above the candlesticks as seen on Fig. 1.0, an exit or take profit is advised.
  3. If the red line of the SMA-Crossover_Signal.ex4 custom indicator crosses its blue line top downward, an exit or take profit is duly recommended.

Sell Entry Rules

Enter a sell order if the following holds true:

Considering the volatile nature of the NFP event risk, we had an initial botched buy entry before a sell trigger was initiated as follows:

  1. If price breaks below an immediate support line (dotted horizontal line of the Pivot_AllLevels.ex4 indicator), it is a trigger to go short.
  2. If the red downward pointing arrow of the SMA-Crossover_Signal.ex4 custom indicator forms above the candlesticks as seen on Fig. 1.1, it is a trigger to go short on positions.
  3. If the red line of the SMA-Crossover_Signal.ex4 custom indicator crosses its blue line top downward, with price bars aligned somewhat below, such a setup is said to be bearish.

Stop Loss for Sell Entry: Place stop loss 2 pips above immediate resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If after breaking a support turned resistance, price surges above an immediate resistance level of the Pivot_AllLevels.ex4 indicator, an exit or take profit is advised.
  2. If the spring green upward pointing arrow of the SMA-Crossover_Signal.ex4 custom indicator pops up below the candlesticks during a downtrend as depicted on Fig. 1.1, an exit or take profit is advised.
  3. If the red line of the SMA-Crossover_Signal.ex4 custom indicator crosses its blue line bottom up, an exit or take profit is duly recommended.

Sell Trade Example

Fig. 1.1

Free Download

Download the Non Farm Payrolls (NFP) Simple Forex Trading Strategy

About The Trading Indicators

The sMAMA.ex4 custom indicator is a trend following indicator that is made up of two lines i.e. blue and red, and are attached to the chart window.

The SMA-Crossover_Signal.ex4 is a technical tool that uses arrows to depict the crossover of two simple moving averaged, one faster SMA and a slower SMA.

The Pivot_AllLevels.ex4 is a line tool that plots visible support and resistance levels.

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