The bias is indeed obvious: most binary option traders only incorporate fundamentals into their trading to the extent of simply staying away from the action when economic news are due to be released.
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Those trading indices, Forex, commodities or stocks have long resorted to news trading to secure an edge and indeed, there are traders out there who have turned this approach into a sort of art-form. Binary option traders can adopt similar strategies too and they too can be successful at news trading.
There are indeed trading tools out there thatwill organize the data, creating a virtual economic news calendar, that will have the importance of various news-releases graphically illustrated, together with the actual, previous and forecast values of the variables involved.
Such a tool is a must for everyone looking to trade the news, and that goes double for binary option traders. One of the simplest ways to trade the news is through the breakout strategy.
This approach requires quite a bit of pre-planning, but its execution is simple and best bitcoin pool trading on economic news on binary options are the signals that call for its application.
This strategy should only be used with news which are likely to elicit a highly predictable movement in the price of an underlying asset. With currency pairs, announcements regarding the increasing or decreasing of the interest rate are potentially such news.
How to Use the Economic Calendar in Binary Options Trading
Usually, when the interest rate is raised, the targeted currency gains. In addition to that, one can of course analyze the ever increasing highs and lows as well as the increasing moving averages associated with the asset price to confirm the general trend which in this case would be an uptrend.
In a hypothetical scenario, the entry signal can be the actual announcement.
The trader may also wait to see what sort of effect the announcement has, entering shortly afterward. The expiry time can be anything from 1 hour to a day.
Two options can in fact be bought: one with a one hour and the other with a one day expiry. This way, regardless of whether the swing happens upward or downward, as long as the price ends up outside of the range, the trade is a winner.
This method is called trading on volatility, because that is indeed exactly what it does.
- No Comments Trading big market events is one of the most productive and fastest strategies in the options market, even if they might seem complex and hard-to-understand at first.
- Strategies for Binary Option News Trading
Often, economic news will create volatility in an asset-price, which will later settle. Such asset-price rebounds can obviously be exploited through binary options as well. Rate this post: 8 votes, average: 4.