The Introductory Guide to Non-Farm Payrolls (NFP)

Non-farm payrolls data releases are influential on both economic policy and financial markets. Discover what non-farm payrolls are, the upcoming NFP dates for 2021 and how you can trade them.

What are non-farm payrolls?

Non-farm payrolls (NFP) are monthly measurements of how many workers there are in the US, excluding farm workers and a few other job types such as government workers, private households and non-profit employees.

The data is collected on a monthly basis by the Bureau of Labor Statistics (BLS) and put into the ‘Employment Situation’ report, which also includes the unemployment rate. The report is released on the first Friday of every month at approximately 8:30am EST – which is 1:30pm GMT.

Each report looks back at data from the previous month, using two surveys:

1. The Household Survey – this provides details on employment demographics, including unemployment rates by gender, race, education level and age
2. The Establishment Survey – this provides the headline number of new non-farm payroll jobs to the economy. It’s usually this section of the data that is referred to as NFP. It details the number of jobs added by industry, hours worked, and average hourly earnings

Understanding NFP releases

NFP releases and unemployment data are used by economists and politicians to assess the state of the US economy, and to create an outlook for future economic activity. There are a few areas that traders particularly should watch out for:

• Unemployment data: This is the most closely watched figure, as it has the most influence over the Federal Reserve’s judgement of economic health
• Sector growth: The report shows which sectors are expanding by adding jobs and which are contracting, contributing to unemployment. This can give an idea of which stocks, indices and ETFs could rise and fall in the future
• Hourly earnings: Wage increases and decreases is also another area of the report that gets attention – as pay growth shows economic health, while reductions in wages shows declining prosperity and falling consumer spending. This could have a knock-on effect to company revenues
• Revisions of the previous NFP report: Any changes to previous growth expectations can create market movements as traders re-assess their current positions

Take home - while each component is important pay particular attention to the predicted and actual unemployment rates released for your fundamental analysis 

Non-farm payroll dates 2021

Take a look at the upcoming NFP dates for 2021.

NFP release date	NFP release time (US/UK)	NFP reference period
5 February 2021	8:30am/1:30pm	January 2021
5 March 2021	8:30am/1:30pm	February 2021
2 April 2021	8:30am/1:30pm	March 2021
7 May 2021	8:30am/1:30pm	April 2021
4 June 2021	8:30am/1:30pm	May 2021
2 July 2021	8:30am/1:30pm	June 2021
6 August 2021	8:30am/1:30pm	July 2021
3 September 2021	8:30am/1:30pm	August 2021
8 October 2021	8:30am/1:30pm	September 2021
5 November 2021	8:30am/12:30pm*	October 2021
3 December 2021	8:30am/1:30pm	November 2021

 *Adjusted for daylight savings differences.

How do US non-farm payrolls impact forex markets

The monthly non-farm payroll report has a substantial impact on forex markets because it’s used by traders as a leading indicator of economic growth, alongside inflation, gross domestic product (GDP) and the monthly payroll report.

If the NFP shows a healthy US economy – with high employment, job growth and wage increases – it’s likely to attract investment from around the world. This could drive up the price of the US dollar and impact major currency pairs.

However, if the NFP shows an unhealthy US economy – with high unemployment, low job growth and wage stagnation – then investment rates will fall. This would likely cause the US dollar to fall in comparison to other currencies.

Keep an eye on pairs such as GBP/USD, EUR/USD and USD/JPY, as well as the US dollar index.

How do US non-farm payrolls impact other markets

Non-farm payrolls reports look at the impact the labour force has on the economy, which will have knock on effects for the stock market and the price of commodities – largely gold and silver.

When the NFP presents strong employment figures, this is a sign that companies across industries are doing well, which can lead to increased optimism around company stocks. However, as positive data also creates a strong dollar, this can negatively affect US indices such as Dow Jones and the S&P 500 – which tend to have a negative correlation with a stronger dollar.

If the NFP data indicates the US economy is in a period of contraction, popular safe havens such as gold and silver may see increased investment flows.

How to trade non-farm payrolls and NFP news releases

1. Open a trading account
2. Research analyst’s predictions for NFP numbers
3. Choose an asset to trade and enter your trade
4. Monitor the market around and after the NFP release
5. Adjust and close positions as necessary

Before the NFP release, economists and analysts will attempt to predict what the headline NFP number will be, and eventually arrive at a consensus estimate. Once the real figures are released, the market response will depend on how close the estimate was to the actual figure – as any surprises will cause traders to rush in and out of positions.

The volatility the NFP creates is what provides traders with opportunities for profit – but it is also risky. This makes it important to have a risk management strategy in place before you trade.

Interested in learning this from the professionals, don’t waste anymore time and check out our courses that cover this in detail https://bit.ly/wanttobeatrader

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A short term buy idea for today

 A short term buy idea for today: NASDAQ profile TBLT (Toughbulit Industries, Inc) - projected to reach $2.50 - that should be target 1

The opening bell just rang so we need to dive in quickly... The future of the global construction industry looks good with opport*unities in residential, non-residential, and infrastructure. According to Research and Markets, the global construction industry is expected to reach an estimated $10.5Tn by 2023, and it is forecasted to grow at a CAGR of 4.2% from 2018 to 2023. This company could take a major advantage as its products can be necessary components in the success of construction in the large, medium, and small scales. For these reasons and more that I'll highlight in my report, there is only one Nasdaq profile to have on your radar today: *ToughtBuilt Industries, Inc. (TBLT)* ToughBuilt is a leading designer, manufacturer and distributor of innovative tools and accessories to the building industry. They market and distribute various home improvement and construction product lines for both the professional and DIY markets under the TOUGHBUILT® name. And in November of 2020, Maxim Group upped their analyst price target for TBLT.  #1. TBLT Potential Catalyst - Analyst Price Target After an in-depth analyst of TBLT, Maxim Group upped their previous $2 price target to a new $2.50 target while reiterating a "Buy" status on this profile. Here is the summary and key details of their report: 3Q20 beats across the board as solid segment sales drive total revenue up 248% y/y and positive GAAP net income. Previously announced major partnerships, including Lowe's, are likely to serve as a significant sales catalyst for ToughBuilt. We raise estimates despite continued uncertainty due to extended impact from CV-19, but we remain confident in the company’s near-term growth initiatives. Given the recent $20M+ public offering of common shares and warrants in June, we do not believe TBLT will require additional capital in the foreseeable future. TBLT is up 14% QTD, but down 60% YTD; with shares trading at 0.4x our increased 2021 revenue estimate vs. peers at 2.0x, we reiterate our Buy rating and increase our price target to $2.50, from $2, representing 1.5x our 2021 revenue estimate. We expect previously announced partnerships with Lowe's and Tractor Supply to serve as a significant sales catalyst in 4Q and 2021. On April 9, ToughBuilt announced that Lowe’s awarded a portion of its soft-sided tool storage business and all of its kneepad business to ToughBuilt. The arrangement is expected to include 30 SKUs and amount to $22.7M in revenues over the first 12 months following initial launch, which we believe started shipping in September 2020; products will be sold at Lowe’s nationwide store locations and online. Lowe’s is a Fortune 50 company with 2,200 physical store locations across the United States and Canada. Separately, on May 12, ToughBuilt announced a new partner w-i-n with Tractor Supply Company (private), which is expected to result in the immediate placement of 81 TBLT product SKUs. Tractor Supply Company is considered the largest operator of rural life. From Friday's close of $1.26, this new price target provides TBLT with upside potential of 98%. Now, I'm not saying TBLT is going to go rocketing to those levels today, but you need to be aware of the potential upside that Maxim Group is tagging this profile with. ----- #2. TBLT Potential Catalyst - Record Q3 Results ToughBuilt™ Announces Record Third Quarter 2020 Results Lake Forest , Calif, Nov. 09, 2020 (GLOBE NEWSWIRE) -- ToughBuilt Industries, Inc. (“ToughBuilt®” or the “Company”) (NASDAQ: TBLT; TBLTW) announced today its unaudited results for the third quarter and nine-months ended September 30, 2020. Operating Results for the Three Months Ended September 30, 2020 Net sales for three-month period ended September 30, 2020 were $16.6Mn, an increase of 248% from $4.7Mn for the same period in 2019. Operating Results for the Nine Months Ended September 30, 2020 Net sales for the nine-month period ended Sept 30, 2020 were $27.4Mn, an increase of 88% from $14.5Mn for the same period in 2019. Gross pro-fit increased by 203% to $11.6Mn in the nine months ended Sept 30, 2020, from $3.8Mn for the same period in 2019. Michael Panosian, ToughBuilt’s Chief Executive Officer, commented, “ToughBuilt delivered record [...] results across the board, despite the CV-19 pandemic impacting the industry globally. I am proud of our tough team and grateful to all retail partners, international manufacturers and global distributors for their ama*zing support and efforts. We continue to navigate today’s complex business landscape and are encouraged to implement more development and growth in all Markets.” “During the third quarter, we increased our inventory levels to ensure timely delivery of products, increased our product pipeline, expanded our customer and manufacturing relationships internationally and utilized our Amazon(dot)com storefront to create more brand awareness and sales to service our end users. We remain committed and confident to providing market-leading innovative quality products for the professionals and other passionate builders.” ----- #3. TBLT Potential Catalyst - Bullish Technical Indicators As of close Friday, TBLT was displaying a multitude of bullish technical indicators according to barchart.  They include: Short Term Indicators 20 Day Moving Average 20 - 50 Day MACD Oscillator 20 - 100 Day MACD Oscillator 20 - 200 Day MACD Oscillator Medium Term Indicators 50 Day Moving Average 50 - 100 Day MACD Oscillator 50 - 150 Day MACD Oscillator Long Term Indicators 100 Day Moving Average 150 Day Moving Average 200 Day Moving Average Additionally, Barchart is reporting its composite "TrendSpotter" indicator to be triggered as bullish too. Furthermore, with several of its technicals triggered as bullish, Barchart is reporting TBLT as a "100% BUY" in the short term. Could this be a sign of a continued vertical move today and the days ahead? ----- #4. TBLT Potential Catalyst - Red Hot Chart / Support Levels Take a peek now at TBLT's 6-month chart below:

As you can see, TBLT was in somewhat of a channel between $.95 and $.60 since July before heating up recently. With this current vertical surge, TBLT is now trading above 3 key lines of potential support. Those are the following: 13-Day Exponential Moving Average 50-Day Simple Moving Average 200-Day Simple Moving Average But, why is this important? When a profile trades above these levels, they can give traders confidence of strong potential support. With strong potential support, a profile may continue to move vertical as we've seen in recent days. ----- #5. TBLT Potential Catalyst - Hedge Funds Take Notice From Insider Monkey: Hedge fund activity in ToughBuilt Industries, Inc. (NASDAQ:TBLT) At Q3's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this sto-ck, a change of 33% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish positions in TBLT over the last 21 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

When looking at the institutional inv-estors followed by Insider Monkey, Ken Griffin's Citadel Inv-estment Group has the most valuable position in ToughBuilt Industries, Inc. [...]. The second largest stake is held by Millennium Management, led by Israel Englander [...]. Some other hedge funds and institutional inv-estors that hold long positions encompass Bart Baum's Ionic Capital Management, Sander Gerber's Hudson Bay Capital Management and. In terms of the portfolio weights assigned to each position Ionic Capital Management allocated the biggest weight to ToughBuilt Industries, [...]. ----- TBLT Potential Catalysts Recap (Top 5) #1. Analyst Price Target #2. Record Q3 Results #3. Bullish Technical Indicators #4. Red Hot Chart / Support Levels #5. Hedge Funds Take Notice

Sources: 

Business insider 

Insider money 

Kai stock news

When are the UK CPIs and how could they affect GBP/USD

The UK August CPIs Overview

The cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0830 GMT.

The headline CPI inflation is expected to arrive at +0.5% inter-month in August while the annualized figure is seen a touch lower at 1.9%. The core inflation rate that excludes volatile food and energy items is likely to have softened to 1.8% last month.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.

How could it affect GBP/USD?

At the press time, GBP/USD is seen making a minor recovery attempt from session lows of 1.2463 reached after the European Commission President Juncker said that risk of a no-deal Brexit remains 'real'. A bigger-than-expected decrease in the UK price pressures could accelerate the declines in the pound back towards the 1.24 handle vs. the greenback.

“From a technical perspective, the pair has been showing some resilience below 38.2% Fibo. level of the 1.3178-1.1959, clearly suggesting that the near-term bias remains in favor of bullish traders. Hence, a follow-through buying interest has the potential to lift the pair further 50% Fibo. level resistance near the 1.2560-65 region, above which the momentum could further get extended beyond the 1.2600 round-figure mark, towards testing the next major confluence region near the 1.2700-20 region - comprising of 61.8% Fibo. level and the very important 200-day SMA. On the flip side, any meaningful pullback now seems to attract some fresh buying interest around the 1.2415 region (38.2% Fibo.) and help limit the downside near the 1.2380 horizontal support.,” FXStreet’s Analyst Haresh Menghani notes.

Key Notes

UK: Core CPI likely to slip to 1.7% – TD Securities

GBP Futures: further upside looks limited

Fed meeting amongst market movers today – Danske Bank

About the UK CPI

The Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

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Written by Dhwani Mahta

Before you can earn you have to learn

Top 7 Books to Learn Technical Analysis

There is a wide range of books available for learning technical analysis, covering topics like chart patterns, crowd psychology, and even trading system development. While many of these books provide outdated or irrelevant information, there are several books that have become timeless masterpieces when it comes to mastering the art of trading.

In this article, we will look at seven books on technical analysis to help traders and investors better understand the subject and employ the strategy in their own trading.

KEY TAKEAWAYS 

• Getting Started in Technical Analysis by Jack Schwager
• Technical Analysis Explained by Martin Pring
• Technical Analysis of the Financial Markets by John Murphy
• How to Make Money in Stocks by William O’Neil
• Japanese Candlestick Charting Techniques by Steve Nison
• Encyclopedia of Chart Patterns by Thomas Bulkowski
• Technical Analysis Using Multiple Timeframes by Brian Shannon

Getting Started in Technical Analysis by Jack Schwager 

This book is an excellent starting point for novice traders that covers every major topic in technical analysis. In addition to covering chart patterns and technical indicators, the book takes a look at how to choose entry and exit points, developing trading systems, and developing a plan for successful trading. These are all key elements to becoming a successful trader and there aren't many books that combine all of this advice into a single book.

Technical Analysis Explained by Martin Pring 

This book is considered by many to be the “Bible” of technical analysis since it contains an exhaustive amount of information covering the core concepts. The book also covers ancillary topics like trading psychology and market mechanics that help traders understand the whyrather than just the how of technical analysis. Despite the wide breadth of knowledge, the book is very approachable and easy to understand for novice traders.

Technical Analysis of the Financial Markets by John Murphy 

This book is an approachable introduction to technical analysis that still provides a high level of detail and actionable insights. As a former technical analyst for CNBC with over 40 years of experience in the market, Mr. Murphy has become a leading voice for technical analysis and is highly skilled at conveying complex topics in an easy to understand manner. Novice traders may want to check out this book before diving into more complex topics.

How to Make Money in Stocks by William O’Neil

This book is considered a classic work on technical analysis and was written by the founder of Investor’s Business Daily, one of the most popular investment publications in the world. O’Neil was a strong advocate for technical analysis, having studied over 100 years of stock price movements in researching the book. In the book, he presents a wide range of technical strategies and tips for minimizing risk and finding entry and exit points.

Japanese Candlestick Charting Techniques by Steve Nison

This book is the definitive volume on candlestick charting, which is one of the most commonly used technical analysis tools. Prior to Nison’s work, candlestick charting was relatively unknown in the West. He helped publicise the technique and train institutional traders and analysts at top investment banking firms. The book offers a thorough explanation of the subject, including explanations of virtually all candlestick patterns that are used by traders today.

Encyclopaedia of Chart Patterns by Thomas Bulkowski 

This book is truly an encyclopedia that contains an exhaustive list of chart patterns a statistical overview of how they have performed in predicting future price movements. Mr. Bulkowski is a well-known chartist and technical analyst and his statistical analysis sets the book apart from others that simply show chart patterns and how to spot them. The updated version of the book includes a section on event trading and patterns that occur with news releases.

Technical Analysis Using Multiple Timeframes by Brian Shannon 

This book has a wide appeal for technical traders because it can be helpful to traders regardless of the strategy that they use. The book highlights the value of applying technical analysis across multiple timeframes to identify trades with the highest probability of success. It also goes well beyond what its title implies and covers subjects including short selling, stop-loss order placement, price target identification, and related topics.

There are more than 10,000 books on technical analysis available to traders, but these seven stand out.

The Bottom Line 

There have been many books written on technical analysis, but some of them have become timeless classics that are invaluable to traders. Those new to technical analysis may want to check out these books to fine-tune their strategies and maximise their odds of success.

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Written by J.B. MAVERICK

Day Trading vs Swing Trading

The time frame on which a trader opts to trade can have a significant impact on trading strategy and profitability. Day traders open and close multiple positions within a single day, while swing traders take trades that last multiple days, weeks or even months. These two different trading styles can suit various traders depending on the amount of capital available, time availability, psychology and the market being traded.

One trading style isn't better than another and it really comes down to which style suits a trader's personal circumstances. Some traders opt to do one or the other, while others may be day traders, swing traders, and buy-and-hold investors all at once.

Day Trading Versus Swing Trading: Potential Returns

Day trading attracts traders looking for rapid compounding of returns. Assume a trader risks 0.5 percent of her capital on each trade. If she loses, she'll lose 0.5 percent, but if she wins she'll make 1 percent (2:1 reward-to-risk ratio).

Also, assume she wins 50 percent of her trades. If she makes six trades per day, on average, she will be adding about 1.5 percent to her account balance each day, less trading fees. Making even 1 percent a day would grow a trading account by more than 200 percent over the course of the year, uncompounded.

On the flip side, while the numbers seem easy to replicate for huge returns, nothing's ever that easy. Making twice as much on winners as you lost on losers, while also winning 50 percent of all the trades you take, doesn't come easily. You can make quick gains, but you can also rapidly deplete your trading account through day trading.

Swing trading accumulates gains and losses more slowly than day trading, but you can still have certain swing trades that quickly result in big gains or losses. Assume a swing trader uses the same risk management rule and risks 0.5 percent of his capital on each trade with a goal of trying to make 1 percent to 2 percent on his winning trades.

Assume he earns 1.5 percent on average for winning trades, losing 0.5 percent on losing trades. He makes six trades per month and wins 50 percent of those trades. In a typical month, the swing trader could make 3 percent on his account balance, less fees. Over the course of the year, that comes out to about 36 percent, which sounds good but offers less potential than a day trader's possible earnings.

These example scenarios serve to illustrate the distinction between the two trading styles. Altering the percentage of trades won, the average win compared to average loss, or the number of trades, will drastically affect a strategy's earning potential.

As a general rule, day trading has more profit potential, at least on smaller accounts. As the size of the account grows it becomes harder and harder to effectively utilize all the capital on very short-term day trades.

Day traders may find their percentage returns decline the more capital they have. Their dollar returns may still go up, since making 5 percent on $1 million equates to much more than 20 percent on $100,000. Swing traders have less chance of this happening.

Varying Capital Requirements

Capital requirements vary according to the market being trading. Day trading and swing traders can start with differing amounts of capital depending on whether they trade the stock, forex or futures market.

Day trading stocks in the US requires an account balance of at least $25,000. No legal minimum exists to swing trade stocks, although a swing trader will likely want to have at least $10,000 in their account, and preferably $20,000 if looking to draw an income from trading.

To day trade the forex market, no legal minimum exists, but it is recommended that traders start with at least $500, but preferably $1,000 or more. To swing trade forex, the minimum recommended is about $1,500, but preferably more. This amount of capital will allow you to enter at least a few trades at one time.

To day trade futures, start with at least $5,000 to $7,500, and more capital would be even better. These amounts depend on the futures contract being traded. Day trading some contracts could require much more capital, while a few contracts, such as micro contracts, may require less.

To swing trade a variety of futures contracts, you need at least $10,000, and likely $20,000 or more. The amount needed depends on the margin requirements of the specific contract being traded.

Trading Times Differ

Both day trading and swing trading require time, but day trading typically takes up much more time. Day traders usually trade for at least two hours per day. Adding on preparation time and chart/trading review means spending at least three to four hours at the computer, at a minimum. If a day trader opts to trade for more than a couple hours a day, the time investment goes up considerably and it becomes a full-time job.

Swing trading, on the other hand, can take much less time. For example, if you're swing trading off a daily chart, you could find new trades and update orders on current positions in about 45 minutes a night. These activities may not even be required on a nightly basis.

Some swing traders, taking trades that last weeks or months, may only need to look for trades and update orders once a week, bringing the time commitment down to about an hour per week instead of per night, or updating orders may not even be required on a nightly basis. 

You must also do day trading while a market is open and active. The most effective hours for day trading are limited to certain periods of the day. If you can't day trade during those hours, then choose swing trading as a better option. Swing traders can look for trades or place orders at any time of day, even after the market has closed.

Swing traders are less affected by the second-to-second changes in the price of an asset. They focus on the bigger picture, typically looking at daily charts, so placing trades after the market closes on a particular day works just fine. Day traders make money off second-by-second movements, so they need to be involved while the action is happening.

Focus, Time and Practice

Swing trading and day trading both require a good deal of work and knowledge to generate profits consistently, although the knowledge required isn't necessarily "book smarts." Successful trading results from finding a strategy that produces an edge, or a profit over a significant number of trades, and then executing that strategy over and over again.

Some knowledge on the market being traded and one profitable strategy can start generating income, along with lots and lots of practice. Each day prices move differently than they did on the last, which means the trader needs to be able to implement his strategy under various conditions and adapt as conditions change.

This presents a difficult challenge, and consistent results only come from practicing a strategy under loads of different market scenarios. That takes time and should involve making hundreds of trades in a demo account before risking real capital.

Choosing day trading or swing trading also comes down to personality. Day trading typically involves more stress, requires sustained focus for extended periods of time and takes incredible discipline. People that like action, have fast reflexes, and/or like video games and poker tend to gravitate toward day trading.

Swing trading happens at a slower pace, with much longer lapses between actions like entering or exiting trades. It can still be high stress, and also requires immense discipline and patience.

It doesn't require as much sustained focus, so if you have difficulty staying focused, swing trading may be the better option. Fast reflexes don't matter in swing trading as trades can be taken after the market closes and prices have stopped moving.

Day trading and swing trading both offer freedom in the sense that a trader is his own boss. Traders typically work on their own and responsible for funding their accounts and for all losses and profits generated. One can argue that swing traders have more freedom in terms of time because swing trading takes up less time than day trading.

A Final Comparison

One trading style isn't better than the other; they just suit differing needs. Day trading has more profit potential, at least in percentage terms on smaller-sized trading accounts. Swing traders have a better chance of maintaining their percentage returns even as their account grows, up to a certain point.

Capital requirements vary quite a bit across the different markets and trading styles. Day trading requires more time than swing trading, while both take a great deal of practice to gain consistency. Day trading makes the best option for the action lovers. Those seeking a lower-stress and less time-intensive option can embrace swing trading.

By Cory Mitchell

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