Beware the Non Farm Payrolls data. Loads of hype but a graveyard for retail traders!

by there Traders now I just want to give a bit of a quick response to a few traders that were asking me he why aren't you trading the non-farm payrolls on Friday it's a big number right can't we make loads of money out of it you know I've been trading for 35 years and the non- Farms yeah occasionally can get into it but otherwise it is just a graveyard for Traders and Friday's numbers were no different check out the price action here on most of these uh major currency pairs now the first three or four hours here even dollar Swiss right the uh where you've got a resistance level on the top side but nothing in between liquidity gets pulled out of the market you've got to sort of then assess the actual overall outcome of the numbers now there's six to eight key variables here now the market we do talk about the non-farm payrolls and the unemployment rate these would be the two top tier numbers but there's another sort of six different variables that could impact the number now we had slightly weaker uh non-farm payroll change than the unemployment rate was as expected then you got weaker manufacturing numbers you've got stronger average earnings Etc so forth and then you got to consider right the interest rate perspective or the forward guidance from the central banks now the market is looking at a 50 basis point cut from the FED right on the 18th of September now these numbers were I'd say on the weaker side and we did see the initial reaction here if I just zoom into Euro you can see where the range here on this hour yeah the dollar fell the fact is because the numbers weren't terrible only going to be cutting by 0.25% not half percent right so that sort of moves towards a stronger dollar move and even if you think you're going to get that right in the first 10 minutes well good luck but you know what the actual currencies didn't really move for about 4 hours after the actual number okay so you've got to be very careful what you wish for right of course there are situations here after 4 hours yep Sterling was testing that support level and then broke through the Aussie was a little bit cleaner right the risk currencies got hit and dollar CAD well with that dollar move right very hard to trade the Canadian numbers with the uh us employment numbers all at the same time the Canadian numbers were weaker so we did see a significant move up in dollar CAD don't forget the price action here especially around that resistance line was incredibly difficult right so don't believe all the out there about the non-farm payrolls it is a big number and if the central bank is telling us they're looking at the numbers very closely will it will have an impact but the problem is liquidity at the time of the release disappears like the banks who provide the liquidity for all of us to trade they know what's going on they pull out the liquidity right and you have a situation where you can have a almost a 100 point spread right or movement on the actual release for you to survive that you've got to have a massive stop loss and that is putting your account under Jeopardy so I just want to come back and sort of reiterate for most traders who are new to this and are looking at the hype and trying to follow traders who are saying you come and watch me trade the non- Farms then this is an absolute graveyard for Traders but it does give us answers to what's going on and that's what you need to be focusing on if you check out the daily charts right you wouldn't even know there was a major event and that's where the key Direction comes from when you're trying to execute off the hourly charts okay if you don't have like technical levels and even if you do look at that false break there above 11140 on Euro you've got uh like movements up and down through trend lines all over the place it is a recipe for disaster but now we know exactly what the fed's doing now it's a great time to trade but for a lot of traders that I see and I've spoken to they are asking me oh I've lost four grand I've lost 5 grand okay don't trade the event you don't trade every economic data event that comes out right if there's a good setup and it's got implications for what the Central Bank may do afterwards then sure but maybe after the release right trying to guess what's going to happen especially on the non- farms is an absolute recipe for disaster right so take this uh release as one of those learning lessons and sit back you don't need to try and cash in on a Friday on the angry angest crankiest number in the market and it will really smash your confidence and your account balance all right guys let's learn from this one good luck cheery all