The forex market is an extremely volatile market and every single second the market is moving according to its own harmony. The professional traders in the financial market are able to predict the future price movement of the financial assets and thus they make a decent profit. But in order to make profit consistently in the market you need to focus on high-quality trade execution and for that, you need to learn the market basics first. If you look at the professional Aussie traders then you will see that every single one them have a very clear idea about the forex market and they know the fundamental factors very well. Unlike the professional traders, the novice traders randomly execute the trades in the market and lose money in the market. The forex market tends to become extremely volatile during the high impact news release like NFP and the novice traders often blow their entire trading account. In this article we will discuss how to trade the NFP news release just like the expert traders.
Macro and micro economics
As news trader, you need to know how to do the perfect fundamental analysis in the market. Most of the novice traders in the forex market often ignores the power of fundamental analysis and execute their trade based on their technical analysis skills. But in order to trade the U.S Non-Firm Payroll data, you need to know about the macro and microeconomics. It might be a sound little bit tough but if you read the news on regular basis then you can easily get a general idea about the economic performance of the U.S economy. So before you trade the NFP news make sure that you know the strength of the U.S dollar by assessing the fundamental factors of the market.
Draw the key support and resistance level
Technical analysis is also required for the perfect trade execution. When it comes to news trading there is no other alternative other than perfect technical analysis in the market. If you are trading CFD during the NFP news release make sure that you draw the key support and resistance level in the higher time frame. Most of the time the market respects the key support and resistance level during the high impact data release. Some of you might say that how do we trade such a high volatile market. The answer to this question is pretty simple. All you need to do is to switch back to the lower time frame and wait for the price action confirmation signal. Once you find the reliable candlestick pattern execute the trades in favor of the long-term trades with predefined stop loss and take profit level.
Control your emotions
Trading the news is one of the most complex tasks in the financial market. When it comes to NFP news trading you must be extremely careful. Make sure that you are trading with the reputed broker like Saxo since they offer an excellent trading platform to their traders in the market. As a professional trader, you should not pay any attention to your emotions rather you should always focus on rational logic in the market. Try to find possible trading signals in your trading platform and relate the news data with your technical analysis. If things go in favor of you assess the risk factors for a certain trade while trading news. Always make sure that you are not risking more than 2 percent of account capital in any single trade even though you are extremely confident that the trade will go in favor of you.
Summary: Trading the high impact news release is just like an art. If you want to make the best outcome by trading the NFP news release make sure that you have a clear understanding about the fundamental and technical analysis section. Once the data is released in the market execute the trade with proper risk management factors.