Important economic data
Currently, there are a number of strategies for financial markets trading. News binary option trading is one of the strategies that a trader can successfully apply and earn money.
Most of the binary broker are offering economic calendars or you can use a separate source to follow important events.
Every trader knows that many brokers have an economic calendar, where every now and then they publish variety of data. This calendar contains both actual and predicted after the publication figures. All this information can be used in trading.
How can we trade on the news
There are many ways to make money on it. Given the fact that binary options have not such thing as requotes, characteristic for the Forex market, brokers always sell the contracts at the price of the underlying asset at which traders buys them.
News binary option trading can be carried out only on the fact of the index publication, and shortly before its publication.
For example, one of the most profitable news, where you can really make money is the publication of the interest rate decision by central banks. If it is left unchanged or rousing, in most cases, currency rate grows. When interest rates falls, the exchange rate usually also falls. This can be used in trading.
For example you can buy the options even before the publication of the interest rate data. Moreover, if the trader expects that the interest rate will remain unchanged or will rise, he buys Call option, otherwise, it would be better to buy a Put option.
It is important to take into account the fact that the expiration should be after the publication of the news. Otherwise the sense of this strategy defeats.
The most significant data for trading
In economic calendars, each published news has its own weight and importance. These is shown in different ways, sometimes using color, sometimes – an exclamation mark. The most significant news usually lead to large movements in the market. Such news are very convenient to trade so we will focus on them.
First of all we will observe a trader interested in GDP data. It is usually published quarterly. It can be preliminary, revised or final. Trading with the Preliminary data report gives you the strongest chances of profit. Therefore, shortly before this news announcement, you can buy binary options.
Unemployment rate - the indicator of economy health is also important piece of news. Therefore, it is necessary to pay attention to it. News on unemployment can greatly differ from each other. In the United States unemployment is expressed in a few indicators. The most powerful of them is the so-called Non-Farm Payrolls.
Binary options trading on the news works pretty well if using inflation indicators. But inflation itself in the form of net interest values will not be published. Usually it is published in the form of consumer price index and other price indices. Therefore, before this news publication, according to forecasts, traders can buy binary options.
Speeches of the central bank representatives strongly influence the markets. Often, they talk about monetary policy in the future. Then strong movements begin on the markets. Therefore, before the performance of major bank representatives you can also buy binary options.
Trading the news is profitable, albeit risky strategy, but many traders successfully use it, getting a decent profit. You need to carefully consider your options expiry time according to the events time.