The strategy “Trading with news” with binary options
Any strategy with binary options suggests certain skills in working with trading platform, and also the estimation of market situation on the price chart. That’s why study in financial markets you should start with the simplest basis – trading with news with binary options. Thus, you will get the most necessary skills in binary options trading and also start earning in trading by this kind of market product.
First of all, trading with news is effective and rather profitable trading. Why? Because usually the edition of macro economical indicators has the quickest reaction of the market and leads to impulse moving of quotations to one or another side. If you have enough time to catch it, you will get the profit. As worsening or improving of economical indicators of country’s economics lead to quotations changes. In this case to trade in these market situations is a great pleasure.
For news trading with binary options, it is better to choose currency pairs. But you don’t need to go to the heart and choose exotic. For news trading main currency pairs will be suitable: EURUSD, AUDUSD, GBPUSD, USDCHF, NZDUSD, USDCAD è USDJPY.
These currency pairs take the main stab after the important macro economical news edition.
The main peculiarities of trading
To trade with profits during economical news, you need:
- Choose the news, you will follow.
- To look through early worked news editions on the history.
- To study the characteristics of currency pairs moving.
- To prepare a terminal with all necessary options, which are given above (option “Constructor”, option “Range, option “Classical”).
As a rule, news, which is suitable for trading, is referred to news of the group “AA”. At the same time, it is not worth taking this news as future boom of currency quotations. Much of this news and releases, which are edited without any deviations from its prognosis, cannot cause impulse moving.
So, for news trading with binary options, it is better to choose such news:
UK (Great Britain)
- Retail prices
- BoE meeting announcement
- Retail sales
- ILO Jobless rate
- BoE meeting minutes
- Trade in goods
- BoE quarterly inflation report
- IFO business climate index
- ECB meeting announcement (the reaction is very seldom)
- ZEW economic expectations index
- ECB press conference
- BOC meeting announcement
- Retail sales
- ADP employment
- New home sales
- Retail sales
- Nonfarm payrolls
- FOMC meeting announcement
- Export /Import
- Existing home sales
- Unemployment rate
- RBA meeting announcement
- Unemployment rate
If you are afraid of such variation, then we advise you to choose - Nonfarm payrolls from ÑØÀ and Employment of all mentioned above countries. Because as a rule economical indices of unemployment cause the excitement in the markets of currency pairs in the countries.
Preparation for the trading
At first, you should give more attention to fundamental prognosis of macro economical situation in the countries with developed economics. Because, as a rule, even the edition of weak indicators Nonfarm payrolls from ÑØÀ and Employment is preceded by the data, which concern the reduction of producing, the decreasing of new houses building and so on. Let’s think logically – if the slippage of production happened, it means that workers of the companies were fired. That is why, working reserves went for writing applications to get the unemployment benefits. In this case, these indicators will be worse than medians of their prognosis. As a result, we will know beforehand what side we should open deals with binary options for sale or for purchase.
After we started understanding in fundamental things, we need to make a habit to open any side with economical news Forex every morning and watch the planned news edition from the list above.
If today is a special day, when the market is marked by the edition of some important release, then:
Firstly do this: 2-3 minutes before the economical news expansionà, we open own web-terminal and take “trader’s poat”.
Secondly: ÊWhen the news expenses and the line of economical news shows its identification, which is worse or better than the previous prognosis, we enter with classical binary options from the market to the side, where the impulsive moving started. In 90% of cases, you will not be able to catch the first price impulse. However, don’t be upset if the moving started, it will continue at least for the next 24 hours.
However, during the first 30 minutes the price goes 60070 % from the necessary way. That’s why, if you couldn’t catch the first carriage of running “diesel locomotive”, don’t be afraid of sitting in the middle of this locomotive. This train will run for enough time and points.
Taking into account that for classical option it doesn’t matter how many points the price will go, it isn’t necessary to worry about the fortune of the deal. The first necessary point it will go for sure.
With the help of option “Constructor” we can make expiration time 1-2 or 4 hours, as it was written above. This period of time the price of the instrument moves in one direction till the first correction backs off. Thus, during the given expiration terms of the order the price will move to given direction.
Option «Range» - suits well to news trading, when we are sure for 100% about the coming out of negative or positive macro economical statistics. In this case, why you should catch the running “locomotive”, if the option “Range” gives us the opportunity to catch this train, taking passengers at the stops. For that, several minutes before the news expansion, we enter the binary option with the option «Out-Range», that is, bet that the price under the pressure of bad news will come out the boundaries of our fixed by option canal. Or, if the news must be expensed in the frame of prognosis, we put In-Range, because the price in the nearest time, won’t move.
Manage the capital.
Of course, you shouldn’t forget that it doesn’t matter was the news information 100%, if you have little deposit, you shouldn’t make serious bets. Set for yourself psychological barrier 2%-5% from the size of deposit and don’t step over it. Thus, you’ll save your deposit from the consequences of unpredictable situation in financial market, which it was famous for.
For news trading you can use:
- classical options, where it isn’t important how many points the price will go off from the spot of entering the deal;
- options Range, with the help of them you can set approximate canal for the breakdown by the levels price, before the important economical news expansion;
- options “Constructor”, which help to set additional, usually not used by brokerage companies, expiration terms.
For news trading expiration time from 15 minutes to 7 hours will suit you
Examples of news quotations behavior
So, 15.07.2014 in Great Britain the release of indices of consumer prices was expensed, which was better than prognosed.
After the news expansion, the price started one side moving. On the quotation chart of currency pair GBPUSD you can see strong recoilless impulse up for 64 points.
The given price moving looks like this on the 5 minutes chart.
As you see, the news expansion shifted market quotations for enough distance. But, everything we needed in this situation is to start purchases with classical option and close a deal with option «Out-Range», price boundaries of which would be broken down easily by quotations.
On our internet-resource, you can find many interesting and effective trading strategies, which help you to come closer and reach your traders targets.
During a week, at least 3 releases expanse, which will suit news trading. As the practice shows, 2 of 3 worked in correlation with trader’s expectations. Thus, we take average profitability of 85%, the starting lot in 100 USD and 3 deals a week (one is loss). So, we have 150 dollars if clear profit a week and 600 USD a month, that is additional to the strategies you use.
For news trading we need the size of a deal 5% from the deposit. Thus for lot in 100 USD, you need a deposit minimum 2000 USD.
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