NFP Whipsaw

Posted on 04. Sep, 2009 by Jakob in Forex Signals, Random Noise

Today I tried trading NFP, and this was one hell of a whipsaw. Before the NFP release I took a short trade on EUR/USD. I was watching the USD/JPY pair at the same time, and as we immediately saw a spike down on the USD/JPY, so I exited my EUR/USD for some 10 pips of profit. I opened a short trade on USD/JPY risking 2% with a stop loss of 100 pips. But then the USD/JPY turned hard, and I closed the trade with a loss of 30 pips. I also took a long position on EUR/USD, as we have seen these two pairs trade directly the opposite the last two month. I was risking 1% here on a 100 pips stop loss. The EUR/USD trade was trading up and down just around my entry, and I didn’t see the spike I expected, so I close that one as well, for some 5 pips of profit. I opened another trade on USD/JPY, going long at 92.960 with a stop loss of 100 pips risking 1% and another short on EUR/USD at 1.4231 risking 1% on a stop loss of 100 pips. I will not post the two trades I closed in profit, as the profits were small and spread was not accounted for, so I guess this should be fair. Only the 30 pip stop loss on the USD/JPY and the two current open trades will be posted in my trade record. The two open ones are currently trading around break even, and I might close them before midnight GMT.

Overall 5 trades in a way too short period. The Non-Farm Employment Change came out better than expected, and the Unemployment Rate came out worse than expected. It that the reason for the whipsaw? It’s possible, but there are so many factors which are involved, and not only these two news releases. People always try to interpret these news releases and believe that they can tell the direction of a pair due to one specific event. It is not like that. In my opinion, the best idea is to look at price action and trade what you see. However, this can be difficult when we have whipsaws like today. Too many trades can easily mess up your mind and your account balance. I did lose focus and this is what can happen when you trade news, specially like NFP. Furthermore, I tried to post these trades on Twitter, but I didn’t post all the details which I normally do. I will probably keep trading news releases in the future, but I need to improve my focus and stick to my plan. However, I will not be posting signals like this on twitter anymore, as I want my readers to get all the details of my trades, and have at least some time to enter the trade. This was not easy today.

Related posts:

1. Non-Farm Payroll – Crazy Whipsaw Action
2. NFP Whipsaw Friday – Oracle Trader Is the S…
3. Forex Signals on Twitter
4. New LMT trades
5. FxBossTrading – 3. update

Tags: forex signal, my forex signal, NFP