ICT January 2018 NFP - Fiber & Cable Practice

Non-Farm Payroll Friday Trading Insights

Market Overview and Initial Thoughts

• The speaker introduces the session, noting it is "non-farm payroll Friday," indicating a significant day for market movements.

• Anticipation of price movement towards an order block before potentially dropping to take out stop-losses at 35.20, suggesting a strategy based on initial market reactions to non-farm payroll data.

Trade Strategy and Risk Management

• Emphasizes caution in trading during non-farm payroll due to unpredictable outcomes; would not risk live money under these conditions.

• If it were not a non-farm payroll day, the speaker would consider entering a short position with a 30-pip stop loss above recent highs.

Market Dynamics and Liquidity Considerations

• Observes that the market has been making lower moves, indicating existing short positions that could be targeted for liquidity.

• Discusses two potential strategies: either going short after hitting resistance or triggering buy stops from those who are currently short.

Understanding Non-Farm Payroll Impact

• The speaker notes that actual non-farm payroll numbers are often already priced into the market and serve as a smokescreen for liquidity runs.

• Highlights institutional behavior around key levels (e.g., 35.80), where they may place orders to manipulate price action against retail traders.

Trading Approach Post Non-Farm Payroll Release

• Suggests that if it weren't for the non-farm payroll event, he would have taken a short position immediately after observing current price levels.

• Mentions maintaining accountability in demo trading by keeping track of account history without executing trades during volatile events like this one.

Seasonal Trading Patterns and Leverage Management

• Describes his approach of waiting until mid-January to engage actively in trading, using minimal leverage initially before increasing it gradually.

• Notes reluctance in price movement above 35.80 despite previous highs being breached; suggests potential consolidation within specific ranges as markets react to end-of-week dynamics.

Understanding Trading Strategies on Non-Farm Payroll Day

The Importance of Timing in Trading

• The speaker emphasizes the significance of not trading on specific days, such as non-farm payroll Friday, to avoid impulsive decisions that could lead to losses.

• Non-farm payroll day is described as highly volatile, likened to a "carnival ride," where market movements can be unpredictable despite having an anticipated direction.

• The concept of a "Judas swing" is introduced, suggesting that the market may initially move against those positioned for profit before reversing direction.

Strategy and Execution

• A note is made about recording price action at increased speed during analysis, indicating a focus on observing real-time market behavior without commentary.

• The speaker discusses adjusting stop-loss levels and taking partial profits when certain price points are reached, demonstrating a strategic approach to risk management.

Market Behavior Insights

• Observations are made regarding potential price erosion and its implications for future trades; the ideal scenario involves movement towards lower prices before key timeframes like 10:00 AM New York time.