I just recently decided I wanted to trade ZN so I've been using a practice account for 2 weeks now, will keep using it for a few months til I feel comfortable. My question is it wise to avoid trading on NFP days? Was watching ZN and I had my stop set for 129'00 and entered the trade last night at 129'03. But lets say NFP came out better than expected, my stop would've gotten ran and my fill would've been considerably lower than I wanted. It jumped from 129'08 straight to 130 in a second. But if opposite happened it could've been an ugly story.
TLDR; How do you guys trade around employment data releases?
It's crazy that you mention this. I just saw this happen a few hours ago and I was wondering what it was. I thought it was a bond auction but it turned out to be NFP. Now I know that NFP affects bond markets I'll know to either sit out until its done or figure out a way to capitalize the opportunity.
Ive read the 10 year is the most liquid bond future but finding info on trading strategies for it is proving difficult. Is it a good instrument to trade? My first approach is to trade using basic support and resistance levels, depending on what works in sim I will adapt new parameters. I am aware that sim fill prices are not realistic so I am tracking my trades in excel and giving myself 1 tick worse on my fills, probably more accurate that way.
I would suggest you give some heavy consideration to this questions before deciding to trade the treasuries around news releases. If you're analysis properly covers the basis on all of these fundamentals, then you're trade strategy around the news release should be good to go. If not...you may be walking into a coin flip.
1. Why the 10 year versus the 2, 5, 30, or even compared to say the German Bund?
2. What is your plan if the data is a hit or miss? How much of a threshold of a miss before your trade plan changes?
3. How much data and research do you have to support your thesis that the data will hit or miss?
4. How does a hit or miss change monetary policy forecasts?
I definitely dont plan to trade around news releases. Just too scary for my tastes, Im sure some people enjoy the thrill but not me.
I like the 10 year because it doesnt move as much as the 30 year, but moves more than the 2 and 5. Not enough action in the 2 and 5 years for my tastes, but the 30 year seems more than I can handle at the moment. I would trade 30 year after I get comfortable with the 10 year though.