Binary Options News Trading
Two types of trading – technical and fundamental
There are technical and fundamental traders. You rarely meet a combination of both. Technical analysts strongly focus on charts to get a best entry signal, while fundamentals are looking for news and company reports for their trading decisions. So, it is important to choose the one that best fits your strategy. Both are very popular among binary options traders. You can trade both ways, but each of them is very broad and deep topic that it would take a lot of time to master them. Thus, it is recommended you focus on technical or fundamental trading. However, even if you a are a fully technical trader you should require basic knowledge of fundaments such as interest rates and unemployment changes. They have major impacts on the market and structure levels can be easily broken during news times.
What news trading mean?
News trading simply means to analyze the fundaments of the market, when you choose put/call options. There are predicted numbers and actual numbers. When the real statistics of news comes the market gets so volatile, because many people are trading those times. This gives a great opportunity to make huge profits.
Where to look at the economic calendar?
There are many websites and trading platforms that provide market news and economic indicators. It is known as an economic calendar. We recommend ForexFactory and Investing.com to look at the news. They include all the reports you need to be aware of. You can set your time zone and you would know exactly when the specific news coming. Some news is more important than the others. When you look at the trading calendar, you will find out which one has the most impact on the market. Those calendars include all the data you need to analyze the news: forecast, previous and actual. You can look for old data too to make comparisons and better analysis.
Which economic news are the most important?
The crucial reports are usually indicated by red color on ForexFactory and three bulls on Invesitng.com. It simply means that the volatility will be increase when the reports will go public. For example, Non-Farm Payroll (NFP) is known as the most traded news. The volume increases dramatically those times. The market can move 100-200 pips in a matter of seconds. It is the US economic report, however, it has an impact on every currency. The USD is the most traded currency worldwide and almost all currency has some level of correlation with it. Moreover, the ECB (European Central Bank) conference is considered very important in the Europe. The head of ECB, Draghi speaks to the public and answer all the questions related to Euro. If you listen to him carefully and analyze his points, you will make large profits during those times.
How to trade news?
Technical analysis is less useful when the ‘market moving’ news is expected. If you are a technical trader, better look at the economic calendar before you enter into the market. If the important news is going to publish soon, make your expiry time shorter. If you are a news trader, better for you. There is 5-10 news on the market every day and if you have the strategy that works you can make nice earning. Make sure you choose short-term expiry times for those moments, as the volatility would not last longer. Ideal trading time would be 2-5 minutes.