Trading Strategy – «Trading On The News»
Today we will consider the most specific and unique approach to conducting trading operations on the binary market, “Trading on the News“. This method of working with options has the most logical algorithm for registering options bets and it offers clear and highly effective signals for trading. Here we will consider not only the technical side of the strategy, but also give examples of the best possible conditions for its use in binary trading, which will allow non-professional investors to profit in the most simple forecasting mode.
News trading – the best possible operating conditions
When using news trading as a forecast generation system, the investor must clearly understand in which conditions the strategy works best. Here the impact on the result is provided by the technical parameters of the terminal, the correct choice of trading assets, the speed of bet registration, access to informational services, the profitability of the options, and many other parameters of binary trading. Against this backdrop, the main issue concerning trading on the news is the choice of a technological and professional platform for working with options. We will not describe the pros and cons of different terminals, rather we will immediately provide a practical recommendation – the best service for news trading is that of the Binomo operator on the binary market. The Binomo broker offers binary options traders the complete list of necessary conditions for effective trading, among which are the following:
- The optimal set of trading assets for news trading – stocks, commodities, currencies, metals
- The maximum speed of technical order processing – 1.7 ms
- Non-stop trading mode
- A high level of profitability of trading contracts – up to 87%
- Daily news reviews with recommendations for trading
- The best possible conditions for initial trading – binary bets from $1, an initial account for $10, which allows you to start trading with a minimum of funds, and promotes effective risk management
Given the technical and trading performance indicators for this platform, we can clearly say that the Binomo broker’s terminal is the most effective for news trading.
“Trading on the News” – selecting an asset
In this regard, the system has the highest level of universality. When choosing an underlying asset, it is necessary to take into account its degree of quote reaction to various kinds of statistical, financial and political news. As a basic set of trading tools, we can recommend commodity assets (oil), gold, as a safe haven asset, and the basic list of currency pairs (the pound, euro, and dollar). These financial assets quickly and clearly react to the news background of the market and make it possible to get the maximum profit with minimal risks.
Trading strategy – “Trading on the News”
So, this strategy’s main principle of forecasting involves the reaction patterns of trading quotes to the news. In this regard, use the most significant publications and statements: statistics from economic sectors, data on resource reserves, financial statistics from governments, changes in the monetary policies of central banks, and bold political statements. For ease of operation when working on this strategy, you can use the special informational service investing.com, which offers a convenient news announcement format that indicates the asset that will be impacted, the level of significance of the publication, the time of its release, and professional forecasts from market experts:
The strategy’s algorithm itself has a logical sequence of action:
- We choose the most significant news publication
- We determine the trading asset to use
- We wait for the release of the statistics
- We register bets according to the principle that bad news (worse than the preliminary forecast) is traded DOWN, and good news (better than the forecast) is traded UP!!!
The advantages of news trading are the high level of signal accuracy, the simple forecasting mechanism, the wide choice of assets, the highest possible effectiveness of trading operations, and the low trading risks.
Let’s consider a classic example – news trading on the underlying asset OIL. This commodity asset greatly reacts to changes in supply on the market. The main statistics in this regard are the growth or decline in hydrocarbon production by the main producers of this resource and the number of boreholes that make it possible to increase or reduce oil production. Here is what we see at the time of the release of this data, which is about an agreement between the main players of this market segment to reduce the amount of production of this resource:
A sharp increase in the price of the financial instrument is the most attractive moment in which to register a trading contract with a binary option. We know the time of the release of the data, the asset that will react to the statistics the most, and we have the Binomo broker’s optimal terminal in terms of its technical parameters. It remains only to analyze the data correctly and quickly register the trading bet at the time of the publication of the data:
The level of efficiency and accuracy of the trading signal for this type of forecasting is 96%, which makes it possible to use trading contracts with a high level of risk – optimally up to 15% of the amount of capital. To maximize the trading results, set bet expirations to 2-3 hours, so you can easily overcome the period of uncertainty on the market at the time the data is released, and you’ll get a guaranteed profit on the contract.
This trading strategy’s efficiency figures show that the technical approach is one of the most effective binary options trading systems.