How to Trade with Non-Farm Payrolls Strategy?
We will give you some amazing tips to trade the Binary options market with an extreme level of precision during the Non-Farm Payrolls (NFP) data release. For you better understanding we will divide the trading strategy into two major pairs. First part will deal with the dynamic support and resistance level. The second part will help you with your trade execution.
Dynamic support and resistance level
Dynamic support and resistance level are amazing tools for binary options traders. Though we can use a different value of the moving average the 100 and 200 SMA is the most popular. If the price is trading below the 100 SMA then we consider the market trend as a down trend. And when it breaches above the 100 SMA we consider it as a trend reversal.
How Trade with NFP release?
Price action trading strategy is one of the most reliable trading systems in the world. Many professional traders use the reliable price action confirmation signal in the lower time to execute their call and put options. When you are participating in Binary options trading during the NFP news release you should trade with price action signal. Let’s see a classic option trade setup during the NFP news.
Figure: USDCHF pair rejecting the 200 SMA in the 1- minute time frame
In the above figure, the red line is 100 SMA and the green line is the 200 SMA. Most of the binary options traders use this dynamic support and resistance level to execute their trade during the NFP. For the above figure, first of all, the traders have assessed the news data. Since the number is positive they waited patiently for the formation of any bullish price action confirmation signal in the USDCHF pair. But when you go for any call option trade make sure that the price action confirmation candlestick is touching the dynamic level. Many traders often execute their trade before the closing of the 1-minute candle. This is very wrong since the formation of the candlestick can drastically change within a fraction of a second.
NFP Trading Rules
Selecting the expiry period is very important in binary options trading. Since you will be using the 1 minute time frame to trade NFP in binary options market it's better for you to stick to the minute expiry period. However, if you do your technical analysis in the 5 minute or 15-minute time frame then you should bring change to expiry level based on your technical analysis time frame. Despite doing all the things perfectly you will often have to deal with the losing trades so make sure that you are not risking too much in any single.
At times the NFP data will be hard to interpret since it will be very close to the forecasted data. So, in that case, you should always stay away from the market. The best trading result can be found when there is a significant difference between the forecasted and real NFP data. Options trading is very much risky. You should never risk any amount that you can’t afford to lose. Always trade with the money which you can lose comfortably.