Each and every economic report is going to have some impact on at least one underlying asset. Sometimes the impact is positive. Other times the impact is negative. For the digital options trader, any type of price movement can be profitable so long as it is predicted correctly by the trader. The Broad Scale Economics strategy is structured around fundamental analysis and is one which all traders can utilize.
Even though this strategy does focus on fundamental analysis, you will not be using it to trade solely based on market news. Instead, you will be using this information as a means of comprehending the upcoming movements as they apply to your chosen asset and then using technical analysis as well. As an example, let’s take a look at the application of this digital options strategy when trading with the EUR/USD Forex pairing…
One consideration would be the current interest rate for each country. This should also include a consideration of an upcoming increase or decrease. The position of each central bank, along with supply and demand, need to be accounted for. The GDP is yet another consideration. A higher GDP usually means a higher interest rate so as to prevent bubbles. And then there is CPI. Inflation can raise interest rates, and higher interest rates can produce higher valued currencies.
Manufacturing and employment data are also very important when it comes to currency values. These are considered to be very important measures of current economic conditions within a country. You can also look to index values as a means of determining whether current sentiment is generally positive or negative. In truth, there are a multitude of clues which can tell you where an asset price may go next.
Once you have a solid grasp on market conditions, predicting the upcoming price movement should not be such a difficult task. This is what the Broad Scale Economics strategy helps to accomplish. Additionally, the process will help to provide you with clues that technical analysis simply cannot provide. Charts are great tools, but they only provide a portion of the overall picture. In order to trade digital options successfully, every angle must be considered.
The Broad Scale Economic strategy can absolutely be paired with other strategies, especially technical-based strategies. One word of caution however – be careful not to allow yourself to get caught up in the excitement of “hot” news or reports. There is plenty of market noise that will need to be tuned out in order to view the markets objectively. Remember, you are not purchasing any stake when trading binary options, so keep that emotional disconnect in place and approach trading from a prediction and not purchase standpoint.