it is time for another TRADE DURING THE NFP AND YOU WILL LOSE YOUR SHIRT review. Yes. I am not being crazy but often this is the outcome if you treat trading during the NFP like a walk in the park.
In the previous review, we saw an almost 100 pips jump in the price. It caught folks off guard.
Looking at the EUR/USD 5 minutes chart above, the strength of the bullish jerk was very strong. Folks who were shorting the currency pair with an over excessive trade size would have been margin called within moments.
Besides this, there were probably folks who were hoping to make a quick deal by shorting the currency pair at pauses in hope that the price action would recover. A waste of hard earned money indeed. The US Non Farm Payroll turned out to be more than twice as worst than expected and investors were probably shocked. This rush of price action was probably due to the emotionally charged closure of long US Dollar positions as investors took a dump in their sentiments. Risk aversion was probably overwhelming too.
While the US unemployment rate remained at 9.5%, it was nonetheless still a high figure and coupled with the recent stream of negative data from the US, investors were probably apprehensive of the future outlook.
As usual, trading during the US Non Farm Payroll is probably not a wise choice.
Trade Safely.
Related Forex Articles from the Koala Forex Training College.
- The US Non-Farm Payroll and the EUR/USD
- The US unemployment crisis
- Risk aversion in forex.
- The story of a margin call. Tom.
