NFP Trading Strategy Guide

The nonfarm payroll, or simply the NFP, is an important event in the economic calendar. But what is nonfarm payroll? When is it? And how can it be interpreted? In this article, we answer these questions, examine how to trade NFP, provide an example of an NFP trading strategy and much more!

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

What Is Nonfarm Payroll?

The nonfarm payroll (NFP) report is a measure of the number of workers in the US economy.

It is released once a month by the Bureau of Labor Statistics (BLS) as part of their Employment Situation report, and shares the number of jobs created, or lost, in the previous month.

As such, the nonfarm payroll is viewed as a key indicator of the health and productivity of the US economy in general and the labour market specifically.

As the name suggests, farm workers are excluded from the statistics, but so too are those employed by:

• Non-profit organisations 
• Private households 
• The Federal Government

This nonfarm classification reportedly accounts for approximately 80% of workers who contribute to Gross Domestic Product (GDP). 

When Is NFP Released?

The nonfarm payroll is usually published on the first Friday of every month at 08:30 US Eastern Time. Traders and investors can keep track of upcoming NFP releases, as well as other important economic announcements, by using an economic calendar. 

How to Read Non Farm Payroll Data

Before the publication of the NFP, forecasts are collected from market analysts and economists. A consensus from these forecasts can be found in the Admiral Markets Forex Calendar.

Below is an example of the most recent nonfarm payroll announcement in the calendar. The last three columns are labelled Actual, Forecast and Previous.

Actual highlights the figures from the NFP release and, subsequently, remains blank until after its publication. Forecast showcases the market consensus for the NFP report and Previous shows the numbers from the previous month. 

The Effect on the Market

If the actual results are in line with the forecast figures, the market reaction tends to be minimal, as the expected figures will have already been priced into the market. However, when the actual results differ considerably from the forecast figures, it can prompt a significant reaction from the markets.

If the nonfarm payroll comes in lower than forecast – i.e. fewer jobs are created than expected – this reflects a slowdown in the job market which is taken as a negative for the overall US economy.

Conversely, if the nonfarm payroll comes in higher than forecast, as is the case in the example above, this is generally considered a healthy sign for the US economy. 

This can have a knock-on effect on the markets. A healthy US economy tends to strengthen the US dollar, meaning Forex pairs involving the USD can be affected by NFP results.  

A strong jobs report can also cause US stocks to rise as it signifies US companies are performing well. Nevertheless, if the nonfarm payroll increases too fast too quickly it could be a precursor to an increase in inflation, which is not good for the economy. When this happens, it can spook the market, causing stocks to fall.

Regardless of the outcome, markets can be volatile in the lead up to, and the time around, the NFP announcement. If the result deviates significantly from the forecast, this volatility is likely to intensify.

Whilst this increase in volatility can provide trading opportunities, it also can significantly increase the risk of trading. For this reason, many traders choose to stay out of the markets around its release. Those that do decide to trade should ensure they have a proper risk management strategy in place.

How to Trade NFP

Below is a one-minute chart of the GBPUSD currency pair which demonstrates the market reaction to a stronger than expected NFP in July 2025.

As we can see, there is a large downwards movement as the USD appreciates against the GBP. The move happens very quickly; in fact, most of it happens within the first minute, although price does continue moving down for a few minutes afterwards.

In this instance, once the market had time to properly evaluate the data, it seems to have concluded that this initial reaction was overdone, and price began moving back in the opposite direction.

However, this won't necessarily always be the case. The five-minute chart of EURUSD below shows the reaction to a previous nonfarm payroll in April 2025, which was also stronger than expected.

In this instance, the initial reaction was not as strong, but the USD continued to appreciate against the euro once the market had had time to properly assess the data.

Because of the unpredictability involved, many traders will avoid trading around the release of the nonfarm payroll. Instead, they may choose to observe what happens but wait until the dust has settled before taking a position in the market.

NFP Trading Strategy Example

Experienced traders who want to try and exploit the market reaction to the NFP announcement might choose to do so with an OCO order.

An OCO order allows traders to define criteria for two conditional orders. If the conditions for one order are met then it is executed, and the other order is cancelled, hence the name OCO – “One Cancels the Other”.

So, essentially, by using an OCO order, traders can create two pending, conditional orders prior to the release of the nonfarm payroll. One order for if the results beat expectations and another if the results fall short.

In order to do so, traders may choose to use a breakout strategy, defining a range in an asset’s price prior to the NFP announcement and using an OCO order which is triggered if price breaks out of this range.

In this scenario, the OCO order would consist of one conditional sell order, to be executed if the lower bound of the range is broken, and one conditional buy order, to be executed if the upper bound is broken. It is important for traders to define the risks upfront and use stop losses.

Final Thoughts

NFP trading is not for everyone.

Many traders, and not just beginners, choose to stay away from the markets around the times of big news releases such as the nonfarm payroll, because of the volatility and wild market movements which can accompany these types of events.

Instead, this group of traders may watch what happens during the news announcement, wait for the market to settle, and then take a decision on what to do based on the announcement and how the market reacted.

If you do choose to trade during the nonfarm payroll, it is recommendable to practise any NFP trading strategy thoroughly on a demo trading account before implementing it on the live markets. It is also crucial to have a proper risk management plan in place.

Trade the NFP on a Demo Trading Account

A demo trading account lets you practise trading in realistic market conditions using virtual currency, allowing you to fine-tune your NFP trading strategy before heading to the live markets. Click the banner below to open an account today:

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:

• This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
• Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
• With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
• The Analysis is prepared by an analyst (hereinafter “Author”). The Author Roberto Rivero is a contractor for Admiral Markets. This content is a marketing communication and does not constitute independent financial research.
• Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
• Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
• Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.