Forex Trading the Non-Farm Payrolls (NFP) After Worst Jobless Claims Ever is the title of a new report by John C. Williams, author of Successful Forex Trading Made EZ. This book reviews the case for a “Forex Neutral” approach to forex trading.
A very important point to know is that during the last three years or so, millions of people lost their jobs and a lot of them don’t have a lot of savings. They are in a good position to make money, because the jobless effects will be temporary. In other words, they may find it hard to get another job but will eventually recover and begin paying the bills again.
When I say “popular financial product,” I am talking about certain mortgage products such as adjustable rate mortgages. During the period after the Great Recession started in 2020, there were a lot of lenders, brokers and investors who were selling bonds that weren’t really worthy of consideration.
For example, as the housing market began to falter, bonds purchased by investors in the aftermath of the economic difficulties were only good for one to three years. Investors realized that the bonds did not offer a decent return, especially since they weren’t able to sell the bonds until a few years later. So, they started to give up on the market and begin to look at other investments, particularly stocks and mutual funds.
On the other hand, the financial institution that sold the bonds to the casual investor had another option: buy the bonds at a low price and sell them at a high price, even though they are of no longer use to the person who invested. The investor got to keep his money and got more income by buying the bond.
Then, there were jobless claims that occurred. This happened right when people started making adjustments to their living situation and saved their money from job searches.
The short period of unemployment, usually up to a couple of months, pushed the investor, who invested in the bonds of financial institutions, to buy more stock and mutual funds. Now, he has access to stocks and mutual funds. He is now a much wealthier person than he was when he began his search for jobs.
And this is the good news. The short period of unemployment provided a huge boost to the economy and boosted stock prices. That is what we call forex trading the non-farm payrolls.
The best part is that in the past, the financial institution that sold the bonds that weren’t worth investing in, put a lower than normal price tag on them. So, the investment cost was lower than the national average unemployment rate, which is quite a nice profit margin.
Now, the investor, who earned money by buying them, was able to sell them and earn even more money by the difference between the higher price and the national average. In addition, the investor could also sell his stocks and mutual funds for much less than the national average price. All of these happen because of the fact that the financial institution that sold the bonds has lost most of its value.
So, now, there are some commercial banks that are insolvent. But the financial institution that sold the bonds to the individual investor has experienced a loss.
Forex trading the non-farm payrolls, with a short period of time, did a lot of good for the economy and contributed to its recovery. It is something I recommend anyone to start doing.