Trading Binary Options based on news or also called fundamental strategy, is a very old type of strategy used in all other markets like Forex or Stock Exchange.
For many traders it is a simple and very practical way to trade and make significant profits.
Most strategies are based on reading charts and understanding some indicators such as RSI, Stochastic, Moving Averages or others, this strategy teaches trading based on news, ie not having to use graphical analysis, but being aware of the economic news that disturbs the market.
Many people have no technical knowledge of analysis, nor are they interested in learning how to use charts and indicators. Some people wonder if it is possible to trade Binary Options without this knowledge and without using the strategies that all websites teach and which are based on this knowledge of graphical or technical analysis.
The answer is yes. There is a very simple way of negotiating that does not require any knowledge in technical analysis.
Advantages of News Based Trading:
- No knowledge of technical chart analysis required.
- You do not need to configure graphs with complex indicators.
- No need to spend hours waiting for an entrance.
- The news has a scheduled time, you only have to negotiate at the times they happen.
- The market usually always reacts the same way to the important news, so the hit rate is very good.
In addition to the strategy I explain below, we also have a news module in our courses.
In this module we explain the most important news and how to trade in each one.
It is a very simple strategy to understand and very good to apply, whether for those who like to trade based on news or for those who operate with analytical strategies but like to have more than one strategy.
We sometimes have promotions where we offer this module , along with other offers for our referrals at the brokerages with whom we have partnerships.
Please inquire with our support if we have any offer campaigns for this active module.
Trading Based on News .
The shape is very simple. You just have to choose a site that has all the important news that drives asset prices. You can use the Forex Factory website , or the Investing website . The calendar has all events per day and hour for the current week.
We just have to know how to apply the results simply in trading Binary Options. How to make? It’s very simple.
Test this and several strategies on the best online platform.
ForexFactory Website News Calendar
News Based Trading – Explanation:
The News Trading Strategy I explain below is different from the one taught in the Course News Module. While this strategy works for short expiration times, 5 or 15 minutes, the news strategy explained in the course news module is for long expiration times, such as 4 hours.
1 – We should just look at the high impact news (see calendars subtitles).
2 – Then we have to understand each news with what will move. In case this site interferes with the assets of the forex or Forex market. That is, in Binary Options we will trade Forex assets. For example, news that is USD will mess with pairs that have USD: EUR / USD, GBP / USD, USD / CHF, etc., etc.
If it is news from the European Union (EUR) there are countries whose news has more impact than others. First is Germany and then France. We should only focus on the news from these 2 countries. And for EUR pairs, like EUR / USD, EUR / GBP, EUR / CHF, etc.
3 – To give an example in a way that the reader understands, imagine that there is a big impact news at 8:00 GMT for Germany (red).
On the Forex Factory website there are 3 columns: The current value (which will be out in a moment), the forecast and the previous value, usually last month.
4 – The news comes out and had a forecast of for example 10 but the result is 9. This means that the value was below the forecast, so it is bad for Germany, which will cause the EUR to tend to fall.
But let’s imagine the news was about unemployment. And that the forecast was 7% but the result was 6.9%, in this case being below is positive, because unemployment has decreased. In this situation the EUR will rise.
The way to know if the result is better or worse than expected is to look at the color of the value that just came out. If it’s GREEN it’s because it was better. In this case it was good for EUR and it will go up. If it is RED it was bad and the EUR will fall against the other currencies.
Trading Based on News – Summary:
- Choose the important news (icon in red). Check if the result is above or below expectations and based on this trade the assets that are directly linked to this news. You don’t have to analyze anything else.
- For this strategy to work, it is important that you act as soon as the news comes out. If the news is at 8 am you have to place the order right at that moment the result comes out.
- Also note that the greater the disparity between the forecast and the outcome, the greater the likelihood that the price will be influenced by this news, the greater the likelihood of making money.
- The type of trade you should use is High / Low and use an asset time or validity of 5 to 15 minutes. Usually within minutes of breaking news the market will react to news results.
From my experience the best ones are the 5 minute ones and the 15 minute ones in this strategy. However the asset itself also varies the results. If you use EUR / USD for example, you can use the 5 minute.
Investing News Calendar. You can switch to Portuguese and choose only the most important news.
Trading Based on News: Caring
There is sometimes news that before the result comes out there is strong market volatility that causes the price to go one way, or move up and down quickly and with wide variations.
If this happens wait for the news to come out and the market to stabilize. After 1 minute put the asset.
Sometimes there is a lot of news at the same time, some for Europe dealing with the EUR and some for the USA dealing with the USD.
In this case sometimes it is better not to trade, for example if you want to trade EUR / USD.
When the news comes out you have to read the result and put the asset in the right direction. For example: If news comes out to USD and is good, and you trade EUR / USD, then the price will fall, as being good for the United States makes USD rise and EUR fall which causes a price drop. at EUR / USD.
Usually this strategy when well applied can succeed 70%, which means that in 10 trades can hit 7 and fail 3.
A brokerage firm offering EUR / USD a gain of around 80% translates into a gain of 56 and a loss of 30 when using this strategy.
The best way to get results is to do some tests on some assets and with different validity (5, 10 or 15 minutes) and understand which ones fit you best.
The advice I always give is if you have 3 wrong trades is because you are doing something wrong or it is a bad day for the strategy. Check everything you are doing and correct the errors. If you are not doing anything wrong then it is because the market is not responding logically to the news coming out.
In this case what you have to do is turn off the platform and no more trading during the day. Just come back the next day.
Add comment