Non-Farm Payroll Reversal On The GBP/USD 7/1/2011
Friday was the first Friday of the month, and therefore we had the release of Non-Farm Payroll. This release was a bit mixed overall. The number came out -47K worse than expected, however the unemployment rate came out .3% better than expected. Usually +/-50K usually creates a sustained move, but this month there was conflict between the headline number and the unemployment rate. In addition to that, and to complicate things more there was a revision to the previous months number….it was revised 20K better than expected.
After taking a minute to go over the numbers we decided to short the GBP/USD when it reached the 200EMA on the 1H chart. If you look at the 1H chart you can see the first initial spike came right into the 200EMA as well as previous trend line resistance. On all Non-Farm trades we always enter the position as a half position. We do this because trades in and around Non-Farm usually carry a higher risk. Therefore we simply use a smaller position size to minimize the risk. Very quickly we saw around +25 pips of profit. I was looking for a bit more out of this trade and did not take profit unfortunately. The trade then came back and closed us out for a -20 pip loss.
Overall we had a great week with only one losing trade over the course of the entire week! Additionally we managed to take +6.5% out of the market last week. We had a great start to the year and I look forward to seeing everyone tomorrow for the start of the second week! If your struggling to become a profitable trader then now is your time. Trading is one career that no one can take away from you. If you haven’t taken the time to get a proper forex education, why not?