Highly anticipated NFP report tomorrow.
Last few unemployment reports we witnessed some extreme volatility, vacuum right before and after the number and to be honest, in my opinion uncertain trading environment ( market orders being rejected due to CME “logic” and more….).
The following are my PERSONAL suggestions on trading during NFP/unemployment days:
· Reduce trading size
· Be extra picky = no trade is better than a bad trade
· Choose entry points wisely. Look at longer time frame support and resistance for entry. Take the approach of entering at points where you normally would have placed protective stops. Example, trader x looking to go long the mini SP at 3825.00 with a stop at 3812.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 3812.75 and place a stop a few points below in this hypothetical example ( consider current volatility along with support and resistance levels).
· Expect the higher volatility during and right after the announcement
· Expect to see some “vacuum” ( low volume, big zigzags) right before the number.
· Consider using automated stops and limits attached to your entry order as the market can move very fast at times.
· Know what the market was expecting, learn what came out and observe market reaction for clues
· Be patient and be disciplined
· If in doubt, stay out!!
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