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NFP week: why I reduce size before the release

AndreiCeau - 1 month ago - 7588 views

During NFP week, forex pairs can become difficult because traders adjust positions before the data. Spreads can widen, direction can flip quickly, and technical levels can break temporarily before the real move begins.

I prefer reducing size or waiting until after the release. If I trade before the data, the setup needs a very clear invalidation point and smaller risk.

The first move after NFP is not always the final move. Sometimes the market spikes one way, clears liquidity, then reverses when traders digest the details.

This is why I like scenario planning around data releases. If dollar strength holds after the second reaction, that is different from a one-minute spike.
A single stock can look strong, but if the index is weak the trade needs extra care. I like to compare the stock with its sector before taking the setup.

I am watching the same zone, but only after liquidity is taken.