News Trading With Binary Options
The strategy is called news strategy, because it is based on fundamental data. This simple strategy for binary options is not only a profitable strategy, but also popular because of many reasons. Moreover, this strategy requires a little time to analyze the market, because significant news is not enough and the trader knows in advance when they will be released, so he can choose in advance to trade only some of that news. Usually the strategy selected important economic indicators, which values change can really affect the price of the asset.
You cannot trade on any news that may come out a few dozen a day, but only selected by the trader from a list of all the news. Economic calendar is highly suitable tool for this strategy.
Strategy #1. Binary options buying on hold, i.e. before the news
For this strategy, the trader selects the news, which will not in the next few minutes or hours, for example, in the late afternoon. Then, depending on the significance of news and expected value, the trader immediately or some time later buys the right option. For this binary option strategy the option fit with the end of life before the news or binary options on which you can take profits in about an hour or two before the news or even earlier.
Strategy #2. Binary options buying for 20-40 minutes before the news
This strategy is used by traders with steel nerves, because it is the game on unpredictable market, namely during the news publication. At such times the market rate can dramatically change its direction. For example, a trader played on the news of Japanese statistical data. Suppose that the data came unexpectedly much better than expected. And if before the market rate was decreasing all day, then after this news it quickly returns to the point where it was at the beginning of the trading day.
Binary options trader buys a half-hour option before the news publication should clearly understand that this is the most dangerous approach to the opening position during news trading. The trader cannot invest significant share of their deposits into such transactions, thereby putting entire deposit at greater risk.
Strategy #3. Buy binary options after the news publication
In this case, the trader is guided by the principle – where the market will go – then I will go there too. Assume that the news came out, then the rate is usually continue to decline and there trader buys an option hoping for a fall. In this situation, it is desirable to choose an option, valid until the end of the trading day, because usually the price goes down the rest of the day, but the next day it may well turn around and go back to the level of the previous day.
In the opposite case, when the news comes out better than expected, the rate usually starts to grow and the trader buys a call option in order to catch the increase.
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