Simplifying Binary Options Trading Decisions by Following the News

man buying stocks

However much binary options trading can be rewarding, no investor wants to trade blind. Many traders have a small number of currency pairs or commodities that they monitor regularly to develop familiarity. A typical day for most traders would start with them checking the economic calendar to review some of the events that greatly affect these ‘favorites’. Crucial announcements and data releases some can also give the trader’s a rough estimate of the gains or losses some pairs can command in a day.

There are times traders choose to avoid some pairs if the prevailing market conditions are too mixed. Binary options let investors trade by choosing out of 180 or more commodities but having a smaller pool of regular options helps people master the recurrent stock or currency behaviors and look for ways to take advantage of them. This is not to say that binary options trade needs complex analysis and research before making a single trade. Binary options trading is very simplified and streamlined to the point that someone just needs to decide whether a pair’s value is going to go up or down and simply click call or put.  One point that has remained true regardless is that the person who is more informed about the day’s order of events and how they affect each commodity is likely to avoid some pitfalls that come with trading without information.

The prediction dilemma

People say that binary option trading is as simple as switching the bedroom lights on or off. Some misleading marketing videos cling to the point that people should simply press the call button if they think the value will rise and press the put button if they think that the value will drop. The topic that many avoid is that of what makes a person decide whether the value will go up or go down. The buy or sell decision is where proper charting, a little analysis and considering the events of the day comes into the picture. In reality, a little more research and caution is not too much to ask for when hard earned capital is on the table.

Some news may push the pairs to suddenly move between 50 and 100 pips at one go. That made a class of traders called breakout traders thrive. Many binary options traders would prefer short term moves and that is why their trading styles and times would be similar to breakout traders. They can both wait for the periods when there is some pending news before placing their trades. Some binary options trading systems simply require the trader to place his expected percentage payout and select the price direction. During high volatility, the traders get the benefit of being able to bet on a higher payout at one go and take advantage of the one-off opportunity.

What makes some currencies more attractive than others?

Professionals usually stick to currencies such as the US dollar, Euro, Yen, Sterling pound and the Swiss franc. These currencies are tied to the world’s major economies and in that sense, the currencies are expected to have high liquidity and there is a practical frequency to the news releases involving their economies. Beginners prefer to trade pairs that are connected to the dollar in one way or another so that all the news affecting the dollar will also determine the success of their trades. Some examples of currencies pairs that new binary options traders prefer to trade include the GBPUSD and the EURUSD. Very experienced traders are also capable of watching how the GBPUSD performs and correlate it to many other commodities and currency pairs just to manage their trades better.



Author: Binary Option Boss

Binary Option Boss is the ultimate resource for binary option traders. We rate, review, and compare the top binary option brokers.

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