Non-Farm Payrolls Forex Trading Strategy

This strategy is excellent to trade the NFP news release in the forex market.

This simple strategy consists of Bollinger Bands and the MACD indicator.

Learn how it works below.

Chart Setup

MetaTrader4 Indicators: Bollinger Bands (default setting), MACD.ex4 custom indicator (12,26,9)

Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes

Recommended Trading Sessions: After NFP news release

Currency Pairs: Majors only

Download

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Sell Trade Example

NFP-forex-trading-strategy

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy position(s) when the following chart or indicator pattern are in display:

  1. If price breaks on the upper outer band of the Bollinger Bands, after a session of contraction, it denotes a buy signal.
  2. If the MACD custom indicator histogram and line forms above the 0.00 level, it is a buy signal.

Stop Loss for Long Entry: Place stop loss below the lower outer band of the Bollinger Bands.

Exit Strategy/Take Profit for Long Entry

Exit or take profit on position(s) if any of the following unfolds:

  1. If price bars closes below the middle band of the Bollinger Bands, an exit or take profit is advised.
  2. If the MACD histogram drops into the 0.00 level, it is a call to action i.e. exit or take profit.

N.B. Wait for 20-minutes after the NFP release before initiating Entry/Exit rules.

Sell Entry Rules

The following conditions or rules will define a sell entry 20-minutes after the NFP release as shown on Fig. 1.0:

  1. If price trades near the lower outer band of the Bollinger Bands, it is a sell trigger.
  2. If the MACD histograms forms below the 0.00, it is a sell signal.

Stop Loss for Sell Entry: Place stop loss above the upper outer band of the Bollinger Bands..

Exit Strategy/Take Profit for Sell Entry

The following rules or conditions will define an exit or take profit:

  1. If price bar closes above the middle band of the Bollinger Bands, take profit or exit order(s) entered.
  2. If the Bollinger Bands histograms and line recoils back to the 0.00 level, an exit or take profit is appropriate.

Free Download

Download the Non-Farm Payrolls Forex Trading Strategy

About The Trading Indicators

The Bollinger Bands is one of the technical studies that is developed by John Bollinger and is made up of a center line and two price channels (bands) above and below the middle line. The middle line is an exponential moving average, while the price channels are the standard deviation of the asset being considered.

The MACD.ex4 is a custom indicator design after the MACD oscillator. Its core function is hinged on being able to identify and follow strong trends, whilst also spotting trend reversals – something that is needed when trading an event risk like the NFP.

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