Now we understand the release and its implications. The numerical difference between actual and expected doesn’t mean anything until you have relative terms attached to it, such as ‘much stronger’ or ‘a bit weaker’. With that context and perspective, the release number will mean something, and we might get an actionable trade.
One of the most important things about trading economic events, is to choose the right instrument to trade. Trading the EURUSD after a Weaker US Unemployment Rate might be catastrophic, given the inconsistency of the EURUSD following that kind of event. With the help of BetterTrader, you can see that trading the S&P 500 would be much simpler in terms of volatility, and choosing a reasonable stop loss and profit target.
We also know that in 9 out of 11 similar situations, the S&P 500 was on an uptrend with a negative unemployment rate. That is very useful to know before unemployment is released. This means we can focus on trading the S&P 500 instead of another instrument that has shown less consistent behavior after this release.
