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The bias is indeed obvious: most binary option traders only incorporate fundamentals into their trading to the extent of simply staying away from the action when economic news are due to be released. Those trading indices, Forex, commodities or stocks have long resorted to news trading to secure an edge and indeed, there are traders out there who have turned this approach into a sort of art-form. Binary option traders can adopt similar strategies too and they too can be successful at news trading.
There are indeed trading tools out there thatwill organize the data, creating a virtual economic news calendar, that will have the importance of various news-releases graphically illustrated, together with the actual, previous and forecast values of the variables involved. Such a tool is a must for everyone looking to trade the news, and that goes double for binary option traders.
One of the simplest ways to trade the news is through the breakout strategy. This approach requires quite a bit of pre-planning, but its execution is simple and straightforward as are the signals that call for its application. This strategy should only be used with news which are likely to elicit a highly predictable movement in the price of an underlying asset. With currency pairs, announcements regarding the increasing or decreasing of the interest rate are potentially such news.
Usually, when the interest rate is raised, the targeted currency gains. In addition to that, one can of course analyze the ever increasing highs and lows as well as the increasing moving averages associated with the asset price to confirm the general trend which in this case would be an uptrend. In a hypothetical scenario, the entry signal can be the actual announcement.
The trader may also wait to see what sort of effect the announcement has, entering shortly afterward. The expiry time can be anything from 1 hour to a day. For example, Binary Options are regulated by Gambling Commission in Great Britain and regarded as gambling bets on the market. The remaining BO companies will have to radically change their business model. It goes without saying that the overwhelming majority of these companies will either disappear or give up BO as many Forex trading companies do now.
On the contrary, other Binary companies try to develop these models allowing for the mistakes made by their predecessors. BO will have absolutely new exchange-traded models, in which a BO company plays the role of outside observer and charges a commission for accepting bets on the market placed by traders themselves against other ones, in the future.
Binary Options will be growing up as Binary Options audience is growing up. You need to leave off a habit of earning large percentages over 60 seconds right now, since the BO scheme is unviable and short-lived, and it will be both banned officially in some jurisdictions and modified by brokers themselves. The BO industry has been growing up and will be developing within the US, Japanese and hybrid models. Undoubtedly, this is good news for experienced traders and bad news for newbie traders.
The future of the BO industry can be also judged by the market in Great Britain, where a hybrid of the US and the Japanese models is used. The state guarantees any payouts rigorously. Only 3 major Binary Options market operators, which people trade with for many years, are represented in Great Britain. The BO operators act as an intermediary, so these BO models leave traders alone with the market and provide them no help. You will have only your brains and your experience, and your broker will play the role of a silent provider of a trading platform for placing bets on the market.
As these models spread around the world, Binary Options will find their new life and concurrently clean itself from the past bad reputation.
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