There are plenty of data reports that can be used to trade binary options for profit, but the Non-Farm Payroll is one of the most important. The NFP report usually has quite the impact on the U.S. markets. Often times the impact is quite predictable, allowing for a number of profitable trades to be executed within just a short period of time. Understanding what specific information this report provides will help you make sound investment decisions.
The United States Bureau of Labor Statistics handles the task of creating the NFP report. The most current version of the report is released on the first Friday of each new month. What the data reveals is the overall number of non-farm working employees within the United States at the time the numbers were counted. Any farm worker, private domestic employee, and government employee is excluded, as are all individuals who work for non-profit organizations.
The report is works to provide government agencies with information about the state of the employment market. Economic analysts use the data to access the overall strength of the U.S. economy, as well as to forecast just where the economy may be headed next. The data shows the overall increase or decrease in the number of jobs for the month. It also reveals important details about weekly working hours, average weekly income, and more.
The assets that are going to be most impacted by the non-farm payroll import include indices, currencies, and commodities such as gold. For binary options traders, there are likely to be a number of different attractive trade setups just after the report is released. It is important to be ready to trade as soon as the data is published. It does not take long for investors to process the new information and launch into action. Typically, there will be a short lull in the market while the data is evaluated, after which more active trading begins.
Should the report be favorable, with the job total increasing, expect an increase in asset prices. The opposite is usually true when the job total has decreased. There will be times when the new data does not differ much from that of the previous month. When this happens, don’t expect to see any huge shifts in the marketplace unless major change had been forecast. During times when economists have predicted a significant change that does not occur, expect investors to take notice and start to trade accordingly.
Consumer spending is directly linked to the number of individuals who are employed. When people are not working, economic conditions will suffer. A higher than expected NFP reading typically send the USD currency and gold moving upward in value, creating “Call” opportunities within your binary options platform. A negative report could cause both to become bullish. The same can hold true for the markets themselves. Lastly, don’t overlook non-U.S. markets, as major market news in the states can and will impact overseas markets.