A great deal of the trading strategies in the financial markets exists currently. The binary options’ news strategy is one of the strategies that can be successfully applied by a trader to make money.
Binary options news strategy: how does it work?
Every trader knows about the existence of the economic calendar, where different data are published from a time to time. This calendar has the factual value, the forecasted value. After the publication, the current value is published too. All of this can be used in trading.
How the news trading can be conducted? There are many ways to earn on it. Taking into account the fact that in the binary options there are no requotes, which are peculiar for the Forex market, a broker always sells the contracts of the underlying asset at the price at which they are bought by a trader.
Binary options news trading can be carried out both in response to a fact of the index’s issuance or shortly before its publication. For example, one of the most profitable news, which can be used to earn, is the publication of the interest rate. If it stays in the status-quo or being raised, in the majority of cases currency’s quotes grow. If the interest rate is lowered, currency usually drops.
It can be applied in trading. You can buy an option before the data are published. At the same time, if a trader expects the interest rate to stay unchanged or to be raised, then he buys the Call option. Otherwise, it is better to buy the Put option. At the same time, it is important to take into account a fact that the expiration time has to come after the publication of news. Otherwise, the sense of such trading is lost.
Binary options news strategy: what events can be traded?
Each piece of news published in the economic calendar has its weight and importance. These indexes are shown in different ways: sometimes using color, sometimes with an exclamation mark. The most substantial news usually leads to the heavy movements in the market. This news is very convenient in trading, so let’s consider it in detail.
So, a trader is primarily interested in the GDP data. Quarter GPD data are usually published. This news can be preliminary, reconsidered, and final. The preliminary news is the strongest. For this reason, you can buy binary options shortly before this news is published.
The unemployment rate, which is one of the indexes of the economy’s health, is the important news too. For this reason, you have to pay attention to it during trading. The unemployment news can be absolutely different. There are the few indexes of this in the USA. The strongest among them are the so-called non-farms.
The binary options news strategy gives good results with the inflation too. But the inflation in the form of the percentage is not published. It is usually published in the form of consumer price index and other price indexes. For this reason, a trader can buy binary options before the issuance of such news depending up the forecast.
Speeches of the central banks’ representatives can influence markets substantially too. They usually speak about the further monetary policy. And the markets come into the strong movement. For this reason, you can buy binary options before the speeches of the central banks’ representatives.
Therefore, the binary options news strategy is a pretty profitable strategy, though a risky too. But many traders manage to use it successfully and to get fairly good profits.