In this post, I will be sharing a rather rare but ” Profitable ” forex trading strategy with You guys.

This is a trading strategy which takes advantage of the ” Gap/s ” in the forex market …( When You spotted one such ” Gap/s “…)

As You might already know that the forex exchange is a 24 hours market and that is why ” Gap/s ” is hardly seem in this market but ( maybe ) occasionally on Monday when market is open again after the break over the weekend.

The strategy I am sharing below is one that takes advantage of such Gap/s in the market and I managed to nail a nice 108 pips trading it.

Before I go straight into the ” details ” on this Gap/s forex strategy……do allow me to share a personal story here first with You….( don’t worry…just a short & sweet one…* smile * )

If You have been reading on my Forex Trading Empire blog, You would know by now that I am a strong believe of  PRICE ACTION Strategies.

In fact, it is by mastering such Powerful Price Action strategies that gave me a major turning point in my forex trading ….and with that….I mean ” finally get to see the results I long for & became a successful forex trader “…

( …Which ultimately enables me to quit my day job as a technician and trade forex full time…! )

So having known that I have sort of ” already mastered ” Price Action trading, some fellow readers actually wrote in to me asking for strategies to trade such ” Gap/s ” in the financial market.

And as I mentioned above that in the forex market, Gap/s is actually very rare except on Monday perhaps ….( or after a long holiday break for the market…)

Hence, these readers who wrote in to me are mostly ” stocks ” traders ! * grin *

Yes….in the stocks market, seeing such Gap/s is like seeing the ” forex market WIHOUT Gaps”…

It is THAT COMMON in the stock market..

This is so because the stocks market operate just like a day job kind of timing - Meaning the market would be closed when it is time for the employees to knock off….

Hence after this so called ” off ” period and market re-opened again, it is very normal to see Gap/s in the market for stocks traders..

So having read through their request, I begin to look out for a GAPPING market condition in the forex market then…..as I would like to write about a forex trading strategy on that to share with You guys..

Although it is rare to see Gap/s in the forex market, but once You learn this strategy from reading this post…..AND if You spot a Gap in future, You would know HOW to grab those pips and add some nice profits to Your pocket too !

Well….unless You don’t like to win and nail profits from the market….else I am sure any fellow forex traders would be more than keen to learn a forex strategy that works ( like a bang ) right ! )…* smile *

Alright….having done with my story…( told You it’s short and sweet ), now let’s get into the main strategy to trade the GAP in the forex market now..

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Trading The GAP/s in the Forex Market - Step By Step Strategies Revealed

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Again….just like what I mentioned in some of the forex strategies posts…

I will ” try ” to make it as easy & simple to understand as possible ok……( of course not too long winded I know…)

Just make sure You really read till the end of the post and read every single word so that You can grasp the entire concept of this strategy..

If needs to….just read 2nd…3rd….or even 5th times  - TILL You understand …..* smile *

It’s FREE to do so anyway….* grin *

OK…..let’s get serious now…

Here’s an screen-shot of where I ” Enter & Exit ” for this strategy - With Stop Loss planned too  :

( Nailing 108 Pips Profits )

If You have not trade any ” Gap “  that happens in the forex market before and wonder is it hard to master at this point of time..

Then I shall assure You that it is NOT That Hard once You can understand the ” concept and psychology ” behind this strategy.

Read on below..

It is an absolute fact that almost everything in this world would undergo a state of change almost every single second..

For example :

- Human would age….

- Those cute little babies would grow day by day …

- After the rain ….there would be sunshine..

- Almost nothing could possibly stay the same state forever…( generally )

However….there are some exceptional here though..

And these are the ” PSYCHOLOGY ” of the market..

As long as it is humans trading the market….there bound to have both FEAR & GREED involve..

This is especially so when  we are trading REAL MONEY here…..and there’s a BIG POSSIBILITY that anyone can lose money in the process……and basically Nobody likes to lose money in anyway….

Hence, the elements of  FEAR & GREED would always EXIST in any financial market….and especially true in Forex - A market where the volatility is so high !

So for this forex trading strategy that take advantages of the ” Gap/s ” in the forex market, it capitalizes on the Human Psychology as well..

Which explains why when there is a GAP UP , most of the time this GAP would get filled by the SELLERS ( bearish sentiment ) in no time….

This means when You can also read certain Price Actions & ” hints ” in the market, You would know whether how to trade this strategy profitably too.

Read on below as I share how to extract the ” hints ” from the market to put all odds on my side…

In fact, on that particular Monday when the forex market opens again, only the few EUR pairs are having such Gap/s…

So why do I decide to trade the EUR/JPY…..but NOT the EUR/USD then ?

Here’s my reason :

I do not like to trade currency pairs which are TOO CLOSELY associated….

Which in this case , the EUR is the common ” based ” currency….so they are definitely closely related…

If I decide to trade both pairs, then the risk would be DOUBLE as well….as both tend to move in the same direction……so if I am wrong…..both would give me headache at the same time…..!

As a full time trader now, I treat the ” RISK ” that I would encounter with extreme cautious and of course I would respect such RISK too…..

I always believe in NOT going against RISK that can be foreseen and NEVER PRESUME everything would be fine……

So for this situation, I decide to choose the EUR/JPY to trade because by looking at the USDJPY chart, it is a clear DOWN TREND / DOWN CHANNEL during that period…

Like this :

From the above screen-shot, You can also see that the USDJPY pair is in a nice DOWN CHANNEL for that period..

When USDJPY is in a DOWN-TREND….

Is USD STRONGER…….. Or JPY STRONGER ?

Am sure You would agree that it’s the JPY that is STRONGER ….right ?

JPY is Stronger than the USD ( which is weaker )…..that’s why it is a DOWN TREND for that period..

So since I know that generally the JPY is stronger than the USD…

Which do I choose to ” SHORT ” then ?  Is it the EURUSD……OR EURJPY ?

Of course I would choose the EURJPY to ” SHORT / SELL ” again for this strategy right since JPY is stronger and that would give me a better chance to succeed..

In forex trading, it is all about ” Knowing ” the PICTURE in the market and then use all these small proven hints to help You make better ( Profitable ) trading decisions end of the day….* smile *

If You are not trading with such confidence yet…..don’t give up…..because I believe if I can do it….You Guys Can Do It Too !  ( and I am not a university graduate ..NOT even having any financial background )

Hang on to Your goals in life and don’t let go…..that’s already half the battle won !

Successful people might not be as intelligent as You are…..but because they DARE to dream big and then work towards that BIG GOALS in life & Achieve SUCCESS…..no matter how hard it is……agree ?

Same for mastering this forex trading too…..! * smile *

Alright….enough of that ” positive thoughts ” stuff….let’s get back into the forex strategy on GAP.

Now that I decide to trade ( SHORT ) the EURJPY instead of the EURUSD ….though both pairs are seen with GAP/s in the market..

Next are the most critical elements to consider and they are namely :

1)  How Do I Decide When To Get Into the Trade To SHORT ?

2)  How Do I Decide What ” Take Profit ” Target To Aim For ?

3)  How Do I Decide What ” Stop Loss ” Target To Use As Well ?

Next coming up, I would be sharing on all these in a step by step manner…

Read On…

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How Do I Decide When To Get Into the Trade To SHORT ?

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Before anything, I need to highlight an important point here first about this EURJPY pair..

It would be good for YOU to consider this ” important point ” that I am sharing now for Your own tradings in future - To increase the odds of winning for Yourself….

You see….as I mentioned earlier that I would be ” SHORTING / SELL ” the EURJPY for this GAP strategy..

BUT….what if I tell You that this EURJPY pair is technically in an UP TREND ?

Does that means I am trading Counter Trend ?

Is that very risky like what other traders said so…?

If You are also wondering ” how uh “….

Don’t worry for now….as after You read my step by step explanations below, Your doubts would be all cleared by then….* smile *

Let me show You the Up-Trend/ Up Channel ( Screen Shot ) of This EURJPY :

As You can see too….this EURJPY is generally in an Up Trend as shown by the UP Channel ..

So although I am taking advantage of the ” GAP ” that happened  in the market…..I cannot just simply jump in and trade without confirming my ” rules & checklist ” though….

If  any trader simply ignore to go through the rules and checklist and hope that everything would be fine end of the day….then that’s the WRONG way to trade I must say..

Long term wise……this type of trader would only SUFFER…..and most likely GIVE UP this forex trading entirely because of the FEAR after losing all the money..

So are You one such trader ?

Hmmm……Not too late to know what’s RIGHT though…..* smile *

For me, I like to use ” CONFLUENCE ” from the market itself to convince myself that it is a set - up that is worth trading..

Yes…..that would include weighing all the RISKS INVOLVE….as well as the Rewards that can be expected…

Here’s how I do it :

1)  Although this EURJPY is in a general UPTREND……BUT  the level that I intend to SHORT actually coincides with the previous ” Critical Resistance Level “

( This is the resistance level that we saw about 400 Pips PLUNGED previously..)

So it is definitely one resistance level I would watch for again this time.

Here’s an illustration to show this ” Critical Resistance Level ” :

2)  Furthermore, this level that I would like to SHORT actually ” also ” touches the Upper Limit of the channel I drawn ( refer to illustration above )…

And the best thing is that a perfect ” PINBAR ” is seen at that upper trendline too - With The Price FAILING To Close Above that trendline !

This is definitely a good sign of a ” Reversal “ for me to SHORT….* smile *

But of course, with the PINBAR alone, it is NOT good enough for me to SHORT yet…

I need the next candle to be a ” BEARISH closed ” to confirm….

And just as I anticipated, after 4 hours, a BEARISH candle closed is spotted - Which is exactly what I am waiting for as a form of ” confluence ” indeed.

As such, I SHORTED 2 lots right at the closed of that Bearish Candle ..

Here’s a screen shot to show :

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Next……How Do I Decide What ” Take Profit ” Target To Aim For ?

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Too many traders commit the mistake of using ” any number ” they like while planning the Take Profit Level WITHOUT considering whether is it REALISTIC or not based on the Price Action in the market.

That is truly wild guessing or just trying their luck ….and hoping that everything would be fine…and their so called ” simply guessing numbers ” kind of Take Profit target would be hit somehow…

Hmmm….I do not like this way of trading definitely as I prefer to be in control instead of ” Hoping  that everything would be fine “….

In order to be in control and feeling really confidence about any position I take…..of course I need to use proper techniques to analyze the Price Action on the market for my ” numbers  ( Take Profits Target in this case ) to be used…

Here’s how I try to ” Anticipate ” what would happen next based on the market flow ( & trend characteristic ) :

Considering it is an uptrend channel for this EURJPY pair…

It is important that we consider whether the Take Profit target we planned to aim for is realistic or not…

( And NO…..we don’t do that by wild guessing or relying on luck …)

But try to anticipate what the market is likely to behave next based on the current Price Action..

Yes….in order for anyone to ” anticipate ” the way I do….it is paramount that Your chart reading and technical analysis skills must be good to a certain standard..

Or else…it would be hard for You to dissect the market like I do…

If You are not at that level yet…..don’t worry….just keep reading from my forex strategies and soon You will get more and more familiar in the process.

Ok…..since I am SHORTING this pair and it is technically on an uptrend…….BUT I already have all the ” confluence ” in place to support my SHORTING BIAS…

It is time to plan my Profit Target now…

Let me first consider the WORST CASE scenario ….

If this drop is just a retracement to the 50% level……can it hit my Profit Target ? - This is my first consideration since I am planning to exit right at the BOTTOM OF THE GAP.

And if You refer to the above screen again, You would see that even if it is just a RETRACEMENT to 50% before resuming Uptrend……My Profit Target Could BE HIT though…….which is good ~!

Of course the other situation would be that Price would plunge to the Lower Channel limit before bouncing up again….BUT this is not my concern as I am only trading the GAP.

So upon considering the worst case scenario, I planned my Take Profit target ( TP ) at the Price 125.900

Here’s an screen shot to show :

Do note that the ” ACTUAL BOTTOM Of THE GAP ” is lower than 125.900…..but I like to give it some allowance by NOT planning exactly at that edge…

After all… forex trading is just a game of WINNING the probability as many time as possible ….again and again to make money every month.….right ! * smile *

Now that we know we are SELLING / SHORTING this EURJPY at Price 126.98…

And aiming the Take Profit Target at Price 125.900..

What else we need to do next ?

The STOP LOSS point of course…….( unless You don’t like to use one…..! Hmm….But I DO HOPE You at least have a Mental Stop Loss Level …….)

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Last Point…….How Do I Decide What ” Stop Loss ” Target To Use As Well ?

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When mentioning about these words ” Stop Loss ” to traders…..it would somehow trigger mixed feelings in each individual…

Why so ?

Because some traders would ONLY feel comfortable when they are using a pre-set stop loss level….

Whereas some others might be comfortable with just a ” Mental Stop Loss “…

On the other hand……some would even go WITHOUT a Stop Loss level - BECAUSE they have been getting hit and hit again until it made them lose confidence with using a Stop Loss now……Arghh!

I must admit that placing Stop Loss level ” Correctly “ can be a REAL CHALLENGE & TRICKY for most ( struggling ) traders.

Using too tight a Stop Loss…..You might get hit….again and again only to see the trend goes the direction You previously wanted..

On the opposite, if You choose to use a bigger Stop Loss, You could not achieve a Good Risk/Reward ratio for Your trades…….

Hmmm…..that’s really frustrating I can understand…… as I also suffer from these problems years back before I succeed with this forex trading.

But once I understand these 2 elements, I begin to see good success :

Element #1 ) The sole purpose of placing a Stop Loss is to ” Protect Our Capital Should The Trade Goes Against Us - Because We Are Wrong About The Direction “

Element #2 ) The Stop Loss level should be placed at a level that the Price is NOT / Less Likely To Breach..

If You allow Yourself to understand these 2 elements and adhere strictly to them for all Your trades…..

…..then Your trading confidence would improve significantly and the fear of seeing Your Stop Loss hit again and again previously would be progressively diminished too by then…

So for this GAP forex strategy, how do I decide ” where ” to place the Stop Loss level in order to obey the 2 essential elements I shared above ?

Very simple for this set - up..

Remember I mentioned these 2 factors above :

1)  Our Entry price coincides with the Previous ” Critical Resistance ” level..

2)  Nice PINBAR spotted bouncing off the Upper Channel Line..

Based on these 2 ” facts “….it is definitely good enough to place the Stop Loss just above that PinBAR !

And I like to give about 10 pips allowance from the tip of the Pinbar just to give it some reasonable room to breathe.

So the calculated Stop Loss level is set at Price 127.58 ( 60 Pips from entry price )

Here’s a Screen Shot to help You Understand more :

A nice and tight 60 pips Stop Loss place above the PINBAR…

And aiming for 108 Pips of Take Profit target…..

This gives us a ( reasonably ) good Risk/Reward ratio of  about 1 : 1.8

Each of these analysis were done before the closed of that 4 hourly Bearish Candle..

And it only takes me about 2 minutes to derive all these numbers and then made my final decision of whether should I trade this set - up…..* smile *

Of course it might look like alot of things to consider here….but once You get better and more confidence through practice…all these would then become 2nd nature to You….

Just like driving…You don’t really take so long to think as compared to the period while You’re learning how to drive…..agree ?

Same thing here applies for forex market analysis….

Of course the main key here is to learn the ” proper techniques ” to do so….and Price Action is the answer….no doubt!

And after about 15 hours of trading….the Profit Target for this trade was hit at Price 125.900.

( for a nice profits of 108 pips )

Here’s the screen shot to share :

Here’s the earnings proof with ” Entry , Take Profit & Stop Loss ” for this trade :

( click to enlarge )

Using this ” Gap ” forex trading strategy, I nailed 108 pips which equates to a nice Profits of USD $2321.82. ( As shown above )

Although ” Gap” is not very common in the forex market as I mentioned right at the start of this post…

BUT by equipping oneself with a proven strategy to trade such GAP ….AND when You happen to spot them in future, You would also know how to trade such ” Gap ” confidently then - Which is definitely an advantage.

Most importantly, You would know what are the ” important factors ” to consider too before deciding whether is that set-up a High Probability one……

And You would also know how to calculate and take all foreseen ” RISKS ” into consideration too….( which is very crucial for long term trading success )

Of course, do not trade LIVE until You are very confident with this trading strategy though..

Practice it on a DEMO account first till You’re confident and ” Really Confident ” is advisable…* smile *

One thing to note here is that if You are competent in trading Price Action strategies already….then trading such strategy which takes advantage of the ” GAP ” in the market is definitely BREEZE to You then…

So do read up more on Price Action if necessary ya….

I shall conclude here for this post..

And I hope You have learn a new ( proven ) forex trading strategy to be included in Your ” strategies basket ” after this…* smile *

Thanks for reading this far…

Happy Trading and spotting the ” GAP/S ” !

In this forex post, You will get to learn my exact ” unique ” forex trading strategy for the Non Farm Payroll using simple Price Actions.  ( 105 Pips Profits )

Just like other trading example I shown in my blog, I am also using Price Action to trade the Non Farm Payroll as well…

( A Major News NOT To Be Missed In Forex Trading ! )

In the first NFP forex strategy, I shared a trading technique which take advantage of some ” reversal ” hints in the market after the release of the actual NFP announcement..

It is a combination of using both ” Fundamental + Price Action ” strategy actually…

And it requires trader to ” get in fast and get out fast ” based on the Price Action in the market..

As I am already very familiar with watching the Price Action formed in the market…

I do not pre-set any Stop Loss or Take Profit level for the previous NFP strategy….BUT rather just rely on the current market condition to decide upon..

However……….some of the traders actually wrote in to me requesting that I shared another strategy in which they can ” Pre-Set  a Stop- Loss level ” …..

As well as ride the market for MORE PIPS each time … ( profits )

Wow !…..

Isn’t that BEST OF BOTH WORLD uh…?

Pre-set a Stop Loss at ” Strategic ” level…

AND…..ride the volatile market ( after news released ) for MORE PIPS…

Is there such a forex trading strategy for the NFP then ?

Good news !

There is and I have been trading using this strategy too…… IF I see a good & proven set-up for this technique for trading the monthly NFP…

If You’re also keen on this technique I personally formulated..

Then do continue reading …

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BUT first……some WARNING for You here first ( grin) :

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For most people who have decided to venture into this forex trading business….it is very ” normal ” for him / her to try to trade the Non Farm Payroll…( at least for once )

Why so ?

Because everywhere You go….be it forex forums or just some forex books from the bookstore, You will definitely see some forex strategies talking about ” trading ” the Non Farm Payroll..

Well…..sad to say this though…

For majority of the people who traded this major news which happen on the first Friday of the month - They Would ” Lose Money ” 9  out of 10 times !

And the LOSSES can be really HUGE for those who purely treat this super volatile news announcement as an ” GAMBLING TOOL “…..

They do not practice money management at all….and simply dump in a BIG portions of their capital thinking that it is ” Easy ” to nail those pips after all…

( just because they have been MISLEADED to thinking that anyone can make A LOT of profits in a really Short period out of it ! )

That is 50% true though…

BUT…..this is a ” Double Edge Sword ” in fact..

You can Win a lot of money in a short period during a NFP announcement….

HOWEVER….You can also LOSE A LOT of money in a very short period too…

If You have had some bad experience with trading the NFP….then am sure You would understand what I meant by the above sentence…..

( ….however if You have not encounter any bad experience yet…..then I hope You do not have to at all ! )

On the other hand….there are some people who also walked away happily making maybe say 10 - 20 pips from trading the NFP..

Yes….they did not lose after all..

BUT…..what about the STOP LOSS ?

Are they going to set it at 10 - 20 pips as well ?

OR….simply don’t care and DON”T set any Stop Loss at all BUT just hoping that ” everything ” would turn out fine ?

Hmmm….that is definitely NOT the way to trade such volatile news I dare say..

Any trader who just ignore this fact and continue to trade in the ” WRONG ” way would definitely find it very hard for them to survive trading the NFP announcement in the long run…

And this is the reason why so many people find it very frustrating about… ( including some of my fellow readers who stumbled upon my forex blog )

That is why recently a lot of my readers wrote in to me asking about my own forex strategy for trading the Non Farm Payroll…

And You might have guessed it too..

Most of these readers are really ” frustrated ” with trading the NFP now…

Because they confessed that they are always trading on a very ” fearful ” mindset and they really want a more ” reliable and proven ” way to conquer this Non Farm Payroll…

Since they are feeling fearful and not confidence about trading the Non Farm Payroll..

Then I ask them this one question too :

“….Why don’t You guys DON”T trade the NFP at all ?

….Since You guys are not confident about Your trading strategy for this super volatile major news announcement ? “

Know what most of them answer me for this question ?

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Most Of Their Answer ( carries this same meaning ) :

They know that Non Farm Payroll is very volatile…..which means the market would MOVE MASSIVELY…

When that happens…there are MASSIVE PIPS for them to grab too…..

That is why they are always ” tempted ” to trade this NFP.

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I have already wrote a post sharing my own forex trading strategy for the NFP in this blog to share with fellow readers previously..

But since I have been getting quite a number of emails ( about 50+ ) asking for more of my strategy that they can model to trade the NFP..

I decide to write another post sharing another strategy for the NFP this time here.

( Which show You how to pre-set a Stop Loss level….and grab MORE PIPS ! )

For each NFP, I would try to trade it definitely..

Unless I am attending to other important activities or events…then maybe would give it a miss..

( Or sometimes if the market condition or set-up is not ” good enough ” for me …I would step aside and don’t want to take unnecessary risk at all…)

For this following NFP strategy, the set-up is a rather ” common ” one which always present during the announcement..

And if You are also trading using Price Action strategies too…

Then nailing good pips from such volatile market condition from the NFP announcement would be ” NO Sweat ” for You then….

Here’s an overview of where I choose to ” Enter & Exit ” for a good 105 pips total ..

And using my so called ” Partial Lots Exit ” technique..

After analyzing the market using Price Actions strategy…

I ” Shorted / Sell “  4 Lots at the Price 1.36890  ( which is the closing price of the bearish candle )

First 2 Lots exited after Take Profit Target of 45 Pips hit….

Last 2 Lots exited after Take Profit Target of 60 Pips hit..

A total of  105 Pips grabbed for this trade using this forex strategy.

( And the beauty of the set-up I look for would most of the time give me a very ” Good Risk/Reward ” ratio…..which is very important for long term success ! )

Read more to find out the details for this proven strategy below……as well as for the screen-shot of the earnings proof for this trade.

Alright….here we go now !

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PS : One more thing which I think You need to know here before we start though…

As I am already ” Very Confident ” with trading mainly using Price Action strategies all these while ( more than 4 years )…..therefore it is  very ” natural ” for me to scan for good set-ups on the chart while trading…

But for the sake of sharing this strategy as ” easy and simple ” to understand as possible for even absolute newbies reading my blog…

I will also include as much details as possible…

So if You already know this basic from reading other forex strategies on my blog….do bear with me for awhile ya….

In fact……..It would be good that You read every single word in this post so You get a ” FULL Picture ” of  this strategy….

As well as my Decision Making Process -  This is worth GOLD !  ( Money can’t buy my brain at least for now…* smile *)

So much for this opening….let’s go into the meat of this forex trading strategy for the NFP now..

To trade the monthly Non Farm Payroll with high accuracy…

It is critical that You at least know the 2 ” important ” numbers namely :

1)   Consensus

2)   Actual

Why so ?

Simply because these numbers would affect the market most of the time….

Especially when it is ” very bad or very good “…

Which is what I called the element of ” Surprise Factor “….

BUT….no matter what’s the actual numbers are…

It is VERY IMPORTANT that You place all the emphasis on the Price Action from the market though…

Confuse with this ?

Don’t worry……read on as I make everything very simple for You to understand below.

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Here’s a screen shot of the actual & consensus numbers taken from Action Forex  ( click to enlarge ) :

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The Consensus is 15k..

But the Actual is -22k…

So technically…this would ” weaken ” the USD.

If You know don’t this yet….

When I am trading the Non-Farm Payroll…I only focus on the EUR/USD pair.

Reason being is that this pair gives me very reliable set-ups according to the fundamental outcome & market’s sentiment..

Am sure You would agree that if what You see on the market are ” most of the time RELIABLE “….

You would be WINNING ” Most ” of the time too….right ? * grin *

OK…..since the USD would be weaken because of the worst actual NFP results ….( -22k instead of 10k )

Then my bias would be an ” Uptrend ” for the time being…

HOWEVER…..

Since this is a different strategy as compared to the previous one where I ” enter and exit fast “….

Of course there are other considerations You need too…..before committing into a position..

So HOW ?

Here are the considerations You must take :

1)  Is this ” Uptrend ” bias ( due to the worst than expected results ) against the MAJOR trend for this pair ?

2)  When is the ” best time ” to get into a trade so as to use minimum stop loss YET it could be placed at a STRATEGIC Price Location….?

Step number 2 is essential as this technique allows You to Pre-Determine a Stop- Loss level ..

Hence….abit of planning is definitely essential !

So upon considering these 2 elements…

We have a problem here though…

Firstly….the major trend has been a ” DOWNTREND ” previously for the EUR/USD….

….and it is against our NFP bias for an Uptrend !

( due actual NFP results & supposedly weaker USD )..

Here’s a screen shot to help You understand better :

From the above illustration…

You can also see that it has been a very Strong Down-Trend ” Prevailing ” for this Eur/Usd pair

So if we intend to Trade Against the Major Trend…..we need to be very skeptical about it though….

So how now ?

Better not trade against the Major trend…..and just give this NFP a miss ?

Well….like what I mentioned above ( and in other posts as well )….

It is good to trade ONLY if the ” set - up ” we want has shown on the market…

No point trading with a guessing mindset or just try our luck…….because most of the time it would only lead to fear, frustration and losing our capital…

Alright……at this point, things get abit ” trickier ” now…

But if You can also read the Price Action from the market like I do…

Then You would know what to look out for…..and how to trade the set-ups with ” confidence ” as well…

Let me show You the strategy on how I nailed 105 pips next..

Right after the announcement of the actual NFP results ( -22k ) at 1330 hour…

The Price actually begin to climb up initially for about 50 pips…..

BUT ” failed ” ultimately forming a Tower  Top ( common Candlesticks Formation ) and PLUNGED big time downwards forming a NEW LOW even…

This shows the SELLERS are somehow ” still dominating ” the market…

So based on this observation, it somehow makes our bias of an UP-Trend…….turning into a DOWN-TREND now…

The key here is to look out for a good and proven ” set-up ” to enter into a SELL trade…

And truly….after a while …this set-up indeed formed in the market and I used it for my ” SELL Entry “..

Here’s an illustration to help You understand more :

Now….referring to the above illustration..

You can also see that the Price started to ” Retrace / Pullback ” after forming a New Low for the session..

The price then ” retrace / pullback ” to a point and FAILED….

Subsequently forming an Inverted Pinbar - Which is a good hint that the Sellers are much Stronger than the Buyers at this stage….

( Also ….if You plot a FIBONACCI on the point it failed…it is also about 50% FIBO level …..which is a good zone to enter for Trend Continuation…)

Upon gathering all these ” hints ” from the market..

I then make my ” SELL Entry ” of 4 Lots for this NFP strategy…

Here’s an illustration for You to understand better :

Now that You know how I analyzed the Price Action in the market to decide on a ” SELL ” trade instead of a BUY…

With this information shared….it would not make my fellow readers happy yet though…

Why  so ?

Because like what I mentioned right at the start of this post..

They wrote in to me asking for a strategy in which they can ” pre-set a Stop - Loss level “…

…as well as ride for good pips during a Non Farm Payroll announcement without feeling ” Uncertain or Stressful ” like what others normally go through….

So next coming up is of course to teach You guys how to decide on a ” strategic ” location to place the Stop Loss..

Wild guessing a stop loss value is definitely NOT GOOD for long term success..

This is due to the fact that a 25 pips stop loss might work for situation A….

BUT….in situation B….You might need 30 pips to survive and allow the trade to breathe freely….

Let me show You how below then..

Here’s the illustration to help You understand better once again :

A ” Strategic ” location to place the Stop Loss is a few pips away from the tip of the Inverted Pinbar…

This is so because the Price has FAILED previously at that level…..

Thus,  if we are right about the direction…..it is very ” less likely ” that the price would breach that level again…

With a 30 Pips Stop Loss..( in this case )

We are going to aim for 2 Profit Targets for this NFP Strategy…

First Profit Target would be 1.5 x our Stop Loss of 30 Pips  ( 45 Pips that is….)

Second Profit Target would be 2 x our Stop Loss of 30 Pips (  60 Pips that is…)

And since I ” Shorted 4 Lots ” ( 2 x 2 separate lots ) into the market …

Then each time I exit would be 2 Lots each…

So does this EXIT Strategy gives You a Good Risk/Reward ratio ?

Of course it does….

( In fact….for all of my forex strategies - Having a Good Risk/Reward ratio is one ” Critical ” element I place a lot of emphasis on and likewise for this NFP strategy )

Do the simple math here and You would agree too…

We are aiming for ” much more ” profits that the stop loss…

So end of the day…..it is indeed giving us a Good Risk/Reward ratio…..simple !

But before You can secure those Pips into Your pocket…

You need to know ” HOW & WHEN ” to exit the FIRST position…

This is very important so as to avoid seeing the profits ( pips ) You successfully nailed previously being given back to the market ” IF ” it reversed…

So how do You do all these to avoid losing all those pips You accumulated then ?

Let me show You this simple yet proven ” EXIT ” strategy next…

I will try to make it simple to understand but no harm reading a few times more if You don’t get it the first time ya…* smile *

Here we go….

After about 23 mins of trading since I shorted 4 Lots at Price 1.36890..

The first Profit Target of 45 pips was hit at Price 1.36430..

So the first position with 2 Lots was ” automatically ” closed with the Pre-set Profit Taking Price..

Since the first half of the trading has been smooth sailing and we have profited 45 pips here…

We still have the 2nd position ( 2 Lots too ) still riding the market..

In order not to lose at all…

We must shift the Stop Loss for this 2nd position to BREAKEVEN now…

This is to protect & truly add advantage to our position…

Even if the market was to reverse…..then at least We Won’t Lose !

Sounds good to You….? * smile *

( I love the feeling of trading ” stress FREE ” anytime…..LOL ! )

IMPORTANT POINTS TO NOTE HERE :

From the above illustration…..

You should see a ” Pinbar ” formed after we have profited the first 45 pips too..right ?

OK…..this is crucial to this exit strategy….so do understand what I have to share next..

IF…..the Profit Target has not been hit AND You see such PIN BAR in the market…

THEN it is ” advisable ” to manually closed the first position ( 45 pips for this case ) …

( And shift the stop loss of the 2nd position to Break-Even too…)

This step is MANDATORY because when there’s a Pinbar formed….most of the time it would retrace/ reverse..

So in order to ” secure more pips “…..we would rather PLAY SAFE abit….and just exit at the candle closed…

Got this so far ?

Good…..

————————————————————————————————————————————————-

Let’s proceed onto the exit strategy for the 2nd position next :

————————————————————————————————————————————————

For the 2nd position, I am aiming for 60 pips of profits like I mentioned earlier ..

This is 2 x  the Stop Loss value ( 30 pips )…..remember ?

And with the Stop Loss being shifted to BreakEven now..

It is basically a ” FREE RIDE ” now …

Cool eh ? * smile *

After trading for about nearly 2 hours…

The Take Profit target of 60 pips for the 2nd position was hit at Price 1.36290..

( Although the price did retrace to almost near our Breakeven point….but fortunately it did not hit that point after that so this trade still proceed smoothly to the TP price….)

Below is the illustration for You to understand more :

Using this NFP trading strategy..

A total of 105 Pips ( 45 + 60 ) have been profited trading over  a 2 hours period…

———————————————————————————————————————-

Here are the 2 earnings screen-shot with the Entry, Stop Loss & Take Profit to share :

1st Earning Screen-Shot ( 1st Position )

( click to enlarge )

2nd Earning Screen - Shot ( 2nd Position )

( click to enlarge )

Using this NFP strategy, a total of  105 pips  ( 45 + 60 ) have been nailed.

Which netted me about USd $2,100.00 of profits from this trade as You can also see from the earnings screen shots above..

Not too bad eh…?

( You can do it too….if You want….! * smile * )

As a matter of fact……

Many people are very keen on trading this super volatile major news announcement which released on the first Friday of the month..

Some people simply made 10 - 20 pips each time…

Some managed to nail 50 - 100 pips ( just like I do ) or even more…

However…..the fact is that only a small percentage survive…. ( out of  the many  who actually tried  …)

So if You’re here reading about this Non Farm Payroll strategy of mine because You truly want to succeed  ( or fight back what You lost previously )..

Then feel free to get familiar with this strategy based on Price Action + Fundamental ( numbers ) on a demo account on the next few NFPs..

This is without a doubt a very Proven Technique to trade the NFP ” Profitably ” and include all the good things most trader wants out of any strategy such as :

1)  You guys want to know ” how to analyse the market for BUY / Sell ” with high accuracy

2)  You guys want to know what  ” stop loss ” to use & WHERE to place it ” strategically “

3) You guys want to know what ” take profit ” to aim for yet maintain within the realistic range..

All of these are made possible because of the power of Price Action basically..

With given ” hints ” from the market ….You would be able to extract those ” hints ” and put to Your advantage…( once You know how ! )

So having read till this point…

What should You do now in order to trade with this kind of confidence and accuracy  then?

If You are still not proficient in reading Price Action directly from the market…

Learn It Of  Course ! *grin *

You would definitely benefit tremendously from Price Action too in the long term in almost ” ANY ” market conditions….not just trading the major news..

Alright…so much for this sharing on my 2nd trading strategy for the NFP…

I hope You have learn another proven strategy now….and also progressively expanding Your forex strategies basket too….

Remember to DEMO any strategy using virtual money first before You use them in any LIVE account alright ?

Trading with confidence override trading with ” Fear and Anxiety ” anytime…….agree ? * smile *

( especially when REAL money is involved…..and nobody likes losing definitely…)

Till then…

Happy trading !

In this post… I shall share on a forex trading strategy which I used to trade the monthly Non-Farm Payroll.

This trading strategy has very high accuracy and it is based on both the fundamental ( actual NFP numbers )….

…..as well as using Price Actions to assess the direction to trade and getting into the best ” entry ” point.

Some traders would just avoid trading the monthly NFP totally as the volatility is just so ” Wild ” and extremely ” High “…

If You do not have a strategy to trade ‘ extremely high volatility ” market’s condition….then it is best to avoid NFP definitely..

What for trade with ” uncertainty ” right ?

A BIG No No….as that is more like trading based on emotions & feelings…

As for myself…

I am literally a big fan of  ” high volatility ” market condition as there are very GOOD Pips to be made - In A Very Short Time Frame !

As such….NFP is one major news announcement and the market would 99% move MASSIVELY..

If You are still not very confident in Your NFP trading ….

Then this NFP forex trading strategy that I am sharing below would most probably benefit You tremendously…( For the next NFP ! )

Before I get into the details of this trading strategy…

Let me provide You with an illustrations showing You on my ” entry & exit ” so You can understand better when I explain the strategy..

Here’s the screen-shot with my entry & exit to share :

For this trade, I nail about 57 Pips ( after spreads )…

Which profited a nice USD $ 2,850 ….( in just a short 5 mins ! )

Can this be called ” fast profits “…?

You tell me …! * smile *

Here’s screen-shot of the earnings to share :

A You see from the diagram above…..although the trend still continues to plunge downwards…

But I only grab about 57 pips ( minus spreads ) and simply exit after that…

Enter fast…..exit fast during such high volatile market condition is the key to secure the profits I must say..

Furthermore…I do not usually use any fix Stop-Loss but solely depends on the ” price action ” of the market to determine my trading decisions…

Which includes cutting losses and exit for a profits ( when it is necessary )…

There are quite a few ” Price action ” trading strategies I use to trade the NFP ..

I will see what ” hint ” the market has given me and I would make my trading decisions ( buy/sell ) in real time…

For this trade, here’s how I execute my decisions to ” Sell ” :

If You don’t know yet….

For any major news announcement…there would be a factor of  ” Surprise  element ” involve..

This is especially so when the actual results are ” much different from the consensus “….

As such….the market sentiment would largely be affected & impacted by such ” element of surprise ” too..

And caused a rather ” Huge & Predictable ” market movement for us to grab some nice Pips from…

For this NFP….the actual results are ” So Much Better ” than the Consensus..

Hence…the USD would be much stronger …( at least for the first hour after the announcement )

This explains why I choose to ” SELL / SHORT ” this Eur/Usd.

Furthermore….the market has even gave me a better ” hint ” with the presents of that Long Upper Wick ….( after a very bullish move )

This definitely re-inforce my ” Anticipation ” of the SELL direction for this NFP trade..

And is my trading strategy for NFP realiable and accurate ?

Well….the profits of Usd $2,850 definitely can prove so right….* smile *

One thing for sure…..if You’re using any of the so called ” textbook technical indicators ” to trade major news such as the NFP..

Then it might be accurate at all & rather lagging in fact….. because everything happens just so fast…

One minute…..it could be UP by 100 Pips..

Next minute….it could retrace or plunge by another 150 Pips…

So learning forex trading strategy which is more ” current ” from the market itself such as the Price Action is definitely a better ( more profitable ) choice while trading the EXTREMELY Volatile NFP……

Agree ?

Alright…so much for this trading strategy to trade the Non-Farm Payroll…

I hope You have learnt something valuable from this post and would be more confident in trading the next NFP to come…

And of course…..grab Yourself so nice ” Quick Profits ” too…..!

Ophz…..never be greedy in any trading especially in a highly volatile market such as forex.

Don’t tell people I mentioned the words ” Quick Profits “…….ya !

Joking here…..* smile *

Feel free to read about my Forex Trading blog for other forex tips and trading strategies ..

Time for me to pen off for now…and go to bed !