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  1. Beginner
    Early Stages for Beginners
    8 Topics
  2. Forex Terminology
    11 Topics
  3. Margin & Leverage
    2 Topics
  4. Personal Psychology Questions
    2 Topics
  5. Psychology for Beginners
    7 Topics
  6. Intermediate
    Identifying Scams
    2 Topics
  7. Brokers for Beginners
    5 Topics
  8. Technical Analysis
    13 Topics
  9. Market Structure
    5 Topics
  10. Completion
    Risk Management for Beginners
    8 Topics
  11. Fundamental Analysis
    9 Topics
  12. Advanced
    Using Indicators
    6 Topics
  13. Technical Analysis (Part 2)
    8 Topics

Non-Farm Payroll

NFP! Something you’ll probably hear a lot about in your trading journey. NFP is probably the most known fundamental event in the Forex market. Some people trade it, and some don’t; but here we’re gonna tell you what it is so you understand the effects when trading the market! 

Non-Farm Payroll or NFP is a report reflecting the unemployment rate within the United States. It’s a crucial economic measure as it shows us how many people currently are unemployed (which can be good or bad, depending on if the number is actually less than the last report, or more people are without jobs from the last report). The jobs they don’t account for in this report are farm workers, government employees, private household employees, and nonprofit employees.

The NFP report is usually published at 8:30AM EST on the first Friday of each month, and there’s always a strong reaction. SO PAY ATTENTION! The last thing you want to do is be in a trade and think you’re going to close it a little bit later on Friday before the week closes, forget that the day is currently Friday the 5th… and the reaction within the market to NFP wipes you out. 

If the unemployment rate is higher than average, (let’s say it’s 6.7% when last month it was 5.9%), the economy is considered to be underperforming, and policymakers will attempt to try and stimulate it. Also know the US Dollar is usually negatively affected if there are more people without jobs, and the opposite is true if the unemployment rate is relatively low (US Dollar positively affected).

NFP is one of the most volatile news events and should be traded cautiously, if not at all. Because of the unexpected rise in uncertainty, traders could be stopped out, or even worse, blow their account. As volatility rises, so do spreads, and wider spreads will result in margin calls if your account can’t handle it.

Since the NFP data is a leading predictor of American employment, it has the greatest impact on currency pairs that include the US Dollar such as EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF to name a few. Basically any pair with “USD” in it. 

When the report is issued, the volatility of other currency pairs can potentially rise as well, and traders must be mindful of this.

Not every NFP is the same. One month you can see GBP/USD rise or fall 300 pips on NFP, and the next month, rise or fall 30 pips. Don’t get caught up in what you see other people doing on the internet. Play it safe and wait for good setups.