STRATEGY 4 of binary options. Trading By Using News
Before telling you about this trading method I would like to show how it works in practice. See the table below to understand this method step-by-step.
From this example, you saw that using news when trading binary options is a real opportunity to make profit.
As such news as changing amount of requests for unemployment benefit affect the market greatly, I used a One Touch tool to earn 250%. If I had bought an ordinary call option, my profit would have been much less.
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Now I will tell about trading by using news in more detail and give you examples of other economic indices affecting the market.
To trade binary options successfully, you should be in the know about important economic news. This is the most profitable and popular strategy for trading binary options. To use this strategy, we should consider a number of economic indices that can affect the price of a certain asset. Such indices include: news about changing inflation rates or interest rates, news about labor market and GDP, reports on profits and losses of leading resource companies.
To trade binary options by using news, you will need an economic calendar which shows date and time of publishing certain news.
Economic calendar at Investing.com is very convenient and simple.
Let’s consider several examples of how various factors affect the US dollar and EUR/USD rate.
GDP (Gross Domestic Product) is one of the main macroeconomic indices. High level of development of a certain country can strengthen its national currency (e.g., US dollar) in the international market. This means that US GDP rising may cause EUR/USD rate to go down. And vice versa: if US GDP is falling, we can expect EUR/USD rate to go up.
Trade Balance is another factor that affects national currency. Trade balance is a ratio between amount of exports and amount of imports. Trade balance is a difference between exports and imports. Trade surplus (exports exceeds imports) causes national currency rate to grow, i.e. increasing US trade balance will strengthen the US dollar, and we should expect EUR/USD rate to fall. Decreasing US trade balance will weaken the US dollar, and we should expect EUR/USD rate to go up.
Unemployment Rate defines the labor market of the country. Rising unemployment means that the economic situation is getting worse, which negatively affects national currency rate. Increasing unemployment rate weakens the US dollar and makes the EUR/USD rate go up. Decreasing unemployment rate strengthens the US dollar and makes the EUR/USD rate go down.
Nonfarm Payrolls is a very important index that “moves the markets.” If this amount is increasing, employment and GDP are increasing too, the US dollar strengthens and EUR/USD rate is expected to go down. If this amount is decreasing, the US dollar weakens and EUR/USD rate is expected to go up.
Below I give potential ways of trading by using this method. These ways include: buying binary options to wait at the end of the day, buying binary options 30 minutes before the news is published, buying binary options after the news is published. Let’s see to each one of these ways in more detail.
Buying binary options to wait at the end of the day. Select the news that is published not now, but in the evening. Depending on the news importance and expected value, buy a binary option that is due an hour before the news is published. E.g., if unemployment rate in the USA is decreasing, it is highly probable that EUR/USD may be falling before the news about unemployment rate is published. In this case, you should buy a put binary option .
Buying binary options 30 minutes before the news is published. This isthe most risky way of trading, because the market is unpredictable, especially during news publishing. I would not advise you to trade large amounts of money. Let’s pretend that the data on a certain index turned out to be worse than expected. If the market rate has been increasing all day long, it may go back to where it started after such news is published.
Buying binary options after the news is published. In this case you should buy an option which coincides with the market direction. Let’s pretend that after the news about rising Nonfarm payroll, EUR/USD rate continued falling. You should buy a put option due at the end of the trading day, because the rate may change its direction the next day. And vice versa: if the news is worse than expectations, EUR/USD will go up, and you should buy a call option due at the end of the day or later.
Summing up, I’d like to say that by using an economic calendar and applying it correctly, you and I have an opportunity to make profit on trading binary options by using news.
Below there are several VIDEOS which will give you answers to some questions concerning OptionBit platform:
How I Make Profit at OptionBit My profit increased to 433,000 rubles!