Late US Non-Farm Payrolls Trade Setup

Short EUR/USD at 1.4308 (SL @ 1.4408)

Short GBP/USD at 1.6394 (SL @ 1.6494)

I am hoping to fetch 60 - 80 pips each from these two positions. I will carry them till Monday if necessary. If profitable, I will post my chart and analysis for this type of setup.

Update: I shorted EUR/USD and GBP/USD once more at these levels - 1.4348 and 1.6420 on Monday morning. Exited the two GBP/USD shorts at 1.6340 and 1.6330 late afternoon. Targets as envisaged. Plus I wanted to reduce risk exposure at this point since EUR/USD seemed to be well-supported. EUR/USD could move higher Tuesday morning but I am going to hold. Hope my gamble pays off.

Update 2: Oh well, a gamble lost on the EUR/USD positions as the price exploded higher at the London opening.

A Classic Non-Farm Payrolls Day

(Originally posted in my day trading blog)

Late Session

No. of signal recommendations: 2

End-of-session Results: EUR/USD (-25 pips) and CHF/JPY (+45 pips)

Maximum potential: +55 pips

Own P/L: +14 pips

Buy the rumours, sell the news. Traders were buying into the USD weakness before the non-farm payrolls report (in fact throughout this week) and took their profits soon after the news releases despite having a very bad job number. We managed to stay out this volatility and only followed two signals in the extended late session which yielded a 20-pip profit overall. This gave us, for the week, a total of 210 pips on the major pairs and another 15 pips on the yen-crosses pairs.

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Forex Autopilot Review: Don't Take Them (Robots) Too Seriously !

Below are some important advices which can be found at the member zone after purchasing the Forex Autopilot Package.



After trying out for another hour today (may be still too early to judge?) using Strategy Tester - the BACKTESTING feature of the METATRADER platform, I have some uneasy feelings about those 8 robots (EAs) with fancy names due to their backtested results !

I have HIGHLIGHTED in RED some of the so-called IMPORTANT advices (as seen in the pic. above) in order to alert users NOT to take them too SERIOUSLY !!! They (i.e. EAs, instructions, and advanced ebook) are probably good EDUCATIONAL MATERIALS with SAMPLES for helping users to learn or get used to the concept of auto-trading in Forex market using expert advisor program.

In my opinion, we probably WON'T understand how they really work or which market conditions they excel, unless undertaking HUGE TASK to find out, i.e. many man hours to observe on our own, or may be even better, ask directly for more information from the developers.

The EA in the name of ProfitStream Advisor looks impressive at first glance by generating streams of profits, i.e. booking small and consistent profits as promised. However, users could end up with a large unrealised drawdown in the most unfortunate circumstances, which do happen quite often when dealing with a volatile forex market.

Therefore, I would suggest you to learn the BACKTESTING function first before strapping the EAs onto a demo or real account. Unfortunately, no detailed instructions are given for this purpose in the the instruction PDF -the only missing info in a clear instruction guide. Here is one useful document I found for you on Strategic Tester to get you started.

P.S There is actually another two more robots being thrown as ForexAutopilot EA's bonus ! The NFP (for trading non-farm payroll job report !) and UltraTrend EAs. They have more detailed instructions than that of the 8 EAs combined. I would probably pay more attention to those two EAs for now. Please share your backtesting or any results with me if they happen to be CONSTRUCTIVE !

P.S.2 My FORWARD test results coming soon..

P.S.3 Andreas just informed me (his words) that Marcus Leary plans to introduce new EA this week with stable results instead of his current set of 8 EAs. We got RESPONSIVE actions from the program developer - via the power of blogs ! Stay tune for more updates as we will ride this EA robot-trading learning progress together, thus making sure that our money is well spent.

See also:
Forex AutoPilot Review part 2: This Could Be The Real Deal ?!
Technical Help: Forex AutoPilot EA

A Simple Guide on Forex News Trading

To make profits from news trading - how ever you look at it - is a difficult task. Here are the four possible trading outcomes you have to accept:

(1) A predetermined loss amount (by using guaranteed stop order)
(2) A higher loss amount (invalid or no stop order due to price gapping) - Worst case scenario
(3) A predetermined win amount (by using fixed target limit level) - Best case scenario
(4) A smaller win amount (by using trailing stop order)

Interestingly, it is also possible to have different trading outcomes from just one news event, simply depending on which market your choose to enter. Let use today's US non-farm payrolls as a case study.

An Example
I was bearish on the USD dollar before the big news and was expecting a lower job report. I was holding three short USD positions into the news event with predetermined target and loss levels. The news came out in favour of my positions first, but the US dollar rebounded strongly after the initial retreat. It was a classic dollar bear trap scenario.

Here are my three different outcomes:
Short USD/JPY yielded +85 pips (scenario 3 above)
Short USD/CAD stopped out -40 pips (scenario 1)
Long AUD/USD stopped out +21 pips (scenario 4)

Must Use Stops
Setting the right stop levels is an imprecise science and involves a lot of trial and error. But it is a must when come to news trading. I would suggest using a reward-to-risk ratio of 2 or better when considering the stop levels. You should also expect a widened spread seconds before as well as after the news releases. Make sure to check with your retail forex broker.

In summary, there are many factors to consider when dealing with economic news releases - part number crunching, part guesswork, part experience. Especially in the forex market, the more you know, the less chance you will mess up. Therefore, give it lots of thought and know your reasoning behind your each move. It is also important to keep track your win-loss rate before deciding to continue on.

EA Back on Track ? (1)

My expert advisor trading has produced some positive results for the past two trading days (at day 13 and 14). And finally, it shows some real signs of recovery from its lacklustre performance since the start of the system.

Attempt to Score Big Winners
4 closed trades today and only 4 minor winners, totalling 62 pips. I have decided not to intervene the system by booking early profits myself. Plus today is US non-farm payroll day. I really wanted to see how my system performed under extreme market conditions. However, all my positions failed to reach their set price targets. They all at one point reached more than 40 pips but eventually stopped out at 10-20 pips on the plus side as the new trailing stop algorithm played its part. There are two new open positions to be carried over to next week. Currently, with a running profit of 80 pips from the two positions and at least 30 pips are guaranteed.

At present, I am still pondering over the system profit-taking strategy. Which is more reasonable in the long run, 1R or 2R profits? And should I intervene to take profits at time?

'Jobs' Done by Forex Killer

Today is the job report day (non-farm payroll Nov 07) for both US and Canada. It is the most important economic event of the month.

Today's price action (i.e strength begets strength) has played right into the strength of my latest software companion.

First, let's look at the USD/CAD. Straightforwardly, the CA job report favoured the sell signal issued by the forex killer software with a 100-pip move.



For GBP/USD, it's slightly tricky as the US job report came out strong and immediately against the system's buy signal. However, the market was resilient and quickly bounced off from the low and it scored another 60 pips at the end.



Tony Juste at FXstreet explained today's extraordinary NFP reaction in his weblog:

... is a clear example of what momentum trading means. We should've expected a good USD behaviour today, and indeed the initial reaction pointed in that direction, but at this very moment, what we see is not more and not less than just a poor soul (USD) left at the mercy of his enemies.

So the dollar woes continue..but it was a job well done by the forex killer signal software.

Related posts:
How to Cope With Price Volatility and News Event
Trading the News via Forex Killer

NFP Day Results

Conservative strategy: +30 ( Approx. 3 hours holding time)
Aggressive strategy: +5

Weekly pip-count: +96 pips for conservative strategy, +140 pips for aggressive strategy

It's a shame that we could not capitalise more on this aggressive play. However, please bear in mind that volatile price swings are quite common in the event of major economic releases. And it is partly my fault too as I should have advised you to keep as many easy pips as possible during the offering of a news event. Basically, a wrong timing for being aggressive.

FYI, I will be sending out my invitations for you to receive the real-time alerts of my trading signals/ideas this weekend. If you are interested, just drop me an e-mail.

Market Pulse:

"This (Non-farm Payroll Report) confirmed the U.S. economy is much better than most of the dollar bears thought. As long as we generate 100,000 jobs a month, there's no chance for the Fed to cut rates."

Trade The News 01-06-07 (Non-Farm Payroll)

"There was an initial spike as people saw the headline figure (Non-Farm Payroll) but the dollar quickly fell back after they realised it hasn't really changed anything".

Soon after the news, my long EUR/USD position was immediately stopped out at 1.3427 for -11 pips due to the stronger than expected job report. I immediately reentered another long position at 1.3423 (don't ask me exactly why ... may be partly due to buying at dip, not giving up etc. ). I noticed that the PCE report was actually showing a tamer rate of inflation. My position was gaining quick on my 2nd entry and I was able to exit for +35 pips just 4 minutes later. Since then, I have been sitting on the side line.

EUR/USD 1-min chart

Trading update: I am very close to my account target of Level 6 after hitting level 5 on Tuesday.

US Session 04-05-07 (Non-Farm Payroll)

Headlines
Dollar steady after below-forecast US payrolls

The non-farm payroll came out lower than expected. Bearish news for the dollar. I waited for about 10 minutes before I entered my positions, simply to avoid any wild price swings that could possibly stop you out. Remember, do not simply rush into positions. I find the following very true when you are trading a news event, You will always be given enough time to response, hence make sure you understand the news properly in order to make the right decision and, most importantly, enter at the best price during that time.

Long GBP/USD - Set to breakeven once in front with 15+ pips. Initially, I wanted to hold the position over to next week but finally made an exit for +40.











Short USD/JPY - I am still holding this one. Actually, I was expecting a bigger reaction from the NFP report earlier. A breakeven trade at least.











Hope you traded well this week. I will be away all week next week.