Use The News To Your Advantage

Use The News To Your Advantage

Binary options are indeed an exciting venture that allow for quick profits in a very short time. However, how can you maximize your results in order to improve your bottom line? One possible way is get to know that markets in order to gain some insight into what’s likely to unfold.

One of the best ways to use the news to your advantage is select a few key assets that interest you and learn about them through financial updates available in numerous news outlets. For example, one of the most talked-about assets is the EUR/USD pair.

It is affected by countless factors that often interplay to create different results. Both the euro and the dollar are affected by a large number of factors, namely economic reports that are released on a regular basis. Therefore, one of the first things to get to know is the economic calendar.

This refers to the release schedule of numerous reports that include a lot of significant data that affects the currency’s exchange rate. However, not all reports are created equally, meaning that some will affect the currency immediately while others will only have a subtle influence.

First and foremost, interest rate changes have a very strong effect on exchange rates, making it one of the most discussed topics on financial news outlets. When a central bank, such as the Federal Reserve, increases U.S. interest rates, it is essentially tightening monetary policy and decreasing the amount of currency available in the market.

This creates a situation in which supply is limited, causing a rise in the currency’s value against its peers. In such a case, it is good to follow the news in order to find out when such an announcement is likely to take place and plan your trades accordingly. Remember, its EUR/USD, meaning that an increase in the dollar’s value against the euro will lower the pair, making a “low” option more suitable.

Another example is the U.S. nonfarm payroll report. The report details the number of new jobs created (or lost) during the previous month and nearly always influences the dollar according to its results. For example, when a small number of jobs have been created in the previous month, the dollar may weaken against the euro, especially if the Eurozone has shown better results in its own data.

In this situation it is best to place a “high” option on the EUR/USD, meaning that the euro will strengthen against the dollar. Having a look at forecasts prior to the release of the report will offer some indication as to how it would be best to trade, but keep in mind that they may be inaccurate at times.

Remember, it is best to focus on a few key assets and then add more as you gain a better understanding of the market. Trading the news is a great way to make your predictions more accurate and is a good way to increase your revenues.

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