The U.S. Unemployment Rate gauges the percentage of the entire work force that is without jobs and aggressively in search of employment in the previous month.
A higher than expected reading is seen as bearish/negative for the greenback, while a lower than expected reading is seen as bullish/positive for the greenback.
Chart Setup
MetaTrader4 Indicators: StepUpDown.ex4 (width modified), Stopd_levels_mtf.ex4 (default setting), RSI.ex4 (14)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes
Recommended Trading Sessions: After news release
Currency Pairs: Pairs against the USD currency, for example EUR/USD.
Download
Download the U.S. Unemployment Rate Forex Trading Strategy
Trade Example (Click the image for full size)
Fig. 1.0
Strategy
Long Entry Rules
Enter a long position 20-minutes after the release of the event risk if the following chart patterns are in display:
- If a price bar closes above the red line of the StepUpDown.ex4 custom indicator, a buy signal is appropriate.
- If price bar forms above the line of the Stopd_levels_mtf.ex4 custom indicator, it is a signal that price is expected to test the next level, thereby supporting upward pressures.
- If the Dodger-Blue line of the RSI (14) MT4 indicator is aligned above the 50.0000 level, it signals a bullish market.
Stop Loss for Long Entry: Place stop loss below support.
Exit Strategy/Take Profit for Long Entry
Exit or take profit on position(s) if the following rules holds:
- If price bar closes below the red line of the StepUpDown.ex4 custom indicator, a reversal is eminent.
- If price retest a resistance level turned support level and breaks the level for the stopd_levels_mtf.ex4 custom indicator, it is a signal that upward price pressure is weaning, thus giving way for an exit or take profit.
- If the Dodger-Blue line of the RSI (14) MT4 indicator drops below the 50.0000 level, it is a signal that price is dipping lower.
Sell Entry Rules
Initiate a sell order 20-minutes after the release of the U.S. Unemployment Rate if the following conditions holds:
- If price bar closes below the red line of the StepUpDown.ex4 custom indicator, a sell is in order.
- If price forms below the line of the Stopd_levels_mtf.ex4 custom indicator as seen on Fig. 1.0, a sell entry is appropriate.
- If the Dodger-Blue line of the RSI (14) indicator drops below the 50.0000 level, a sell is eminent.
Stop Loss for Sell Entry: Place stop loss above resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit on position if the following chart patterns are in display on the activity chart:
- If price closes above the red line of the StepUpDown.ex4 custom indicator, an exit or take profit is advised.
- If price retest a support level turned resistance of the Stopd_levels_mtf.ex4 custom indicator and breached such a level, it indicates that price making a U-turn.
- If the Dodger-Blue line of the RSI (14) indicator climbs above the 50.0000 level, it signals a reversal in trend.
Free Download
Download the U.S. Unemployment Rate Forex Trading Strategy
About The Trading Indicators
The StepUpDown.ex4 custom indicator is a trend indicator that delivers buy and sell signal by drawing on the directional movement of price.
On the other hand, the Stopd_levels_mtf.ex4 custom indicator plots support and resistance levels that can be used to gauge points in the market where price tends to experience reversals or continuations in its trend.
The RSI (14) is a momentum oscillator that was developed by J. Welles Wilder to gauge the speed and change of price movements.
The RSI (14) moves between 0 and 100. Overbought conditions are said to be above 70, while oversold conditions are measured below 30.