Learning to use the Economic calendar in binary options trading

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Learning to use the Economic calendar in binary options trading

The economic calendar is a systematized resource in which to store information about the world news of the economy, finance, indicators of the movement of economic trends, data on events in the world’s largest markets. Also, as a rule, these sites contain a lot of statistical information, as well as many indexes and indicators that will be useful for each trader.

How to use the economic calendar

Any economic calendar carries in itself useful information that you need to learn how to apply correctly. But, in order to apply it, you first need to learn how to correctly filter these data for our needs.

In trading binary options, owning an economic calendar will quickly help you master the basics of trading knowledge with binary options.

To use it, you will need to learn how to segment information by date, country, level of importance, and other useful categories.

One of the most notorious strategies that have been used in trading binary options relate to forecasts of volatility. This is a very good thing that will help manage your risks even better. Now let’s talk about the news. Orient an unprepared person in the economic calendar will not be so easy. But everyone can learn.

On an example investing.com we will select the most important moments of orientation on an economic calendar:

– The most important news is highlighted by three special symbols. They symbolize the news with the highest level of volatility.

– News that do not carry a particular importance is highlighted with one special symbol.

– Each economic report is marked with “optimal values”, which is indicated when the data given correspond to the norm for the reported indicators.

– Comparison of expected and actual results. And also the comparison of data with the levels of historical highs and lows.

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– Track economic reports and news for certain countries, they will affect the currency pairs that are of interest in trading binary options.

– The reaction of the market to this or that news will be a signal to the trader for binary options to open new positions.

There are different opinions about these news from traders by binary options and not only by them.

– In the first case, traders recommend to extract from such news a maximum, proceeding to trade based on the so-called newsfactor.

– In the second case, traders recommend waiting for a favorable environment, when the news factor will not affect the process of trading binary options.

Do not forget that you can not focus on the news factor fully, because there are many other factors that affect the binary options trade in general. The news factor has a high level of unpredictability and volatility. Rely only on it is not worth it.

The most valuable events in the economic calendar

These are the messages that provoke fluctuations in the exchange rate of 75-155 points within a short period of time. The rest of the news of the economic calendar does not have such a strong impact on the market.

Appointment of the head of the Central Bank

For each country, this event brings with it changes in the financial policy of the country. What they will be – all this will depend on the elected head and the vector in which he will implement political reforms. The interest rate is one of the key economic factors, which can be affected by the decision and policy of the new head of the central bank. The change in the interest rate level, as a rule, will immediately become known after the meeting of representatives of the Central Bank.

Press conference

At a press conference, the leaders of the Central Bank provide general information on the situation that has developed to date.

The minutes of the meeting of the CEOs of the Central Bank

This information gives the trader a better understanding of what is happening, after the Central Bank has solved the problems for a short term. In voyu turn, it gives an opportunity to understand in what direction a long-term solution will be made.

Changes in the interest rate level

This phenomenon occurs as a result of previous factors. Also, interest rates are influenced by GDP and other indices, which reflect the level of the economy in the country. The lower the interest rate level, the better the level of economy in the country is expected to be.

The rate of inflation

The level of inflation reflects the general welfare and general level of purchasing power of citizens of the country. The lower it is, the more valuable the money. This, in turn, does not allow the money to depreciate. The state also has its own advantage, since people can spend more money. Taxation only benefits from this.

Gross domestic product

It is the equivalent of all services and goods that are produced within a particular country in a certain period of time. The higher this indicator, the better the level of the economy in this country. Excessively large values ​​of this indicator can provoke a sharp drop in GDP.

Labor market

The labor market can have different values ​​from deficit to surplus. These two phenomena can be displayed both by employers and by workers. The state always strives to keep this market within certain limits. Since, lack of jobs as well as their excess can lead to not the best results.

What we have in the end

The news factor is actively used by a large number of traders. Many of them have learned to turn this factor into the secret of success in trading binary options. This factor can successfully diversify risks when trading binary options. And also, it is perfect as a comparator when applying certain trading schemes.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

NOTE: This article/material is not an investment advice.

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What is economic calendar and how to use it?

Economy as itself is very important since it affects global finance market. That is why you need to know what is happening in order to succed in binary options trading. That is why economic calendar is a good tool which can give you better insight. You can always follow at our binary options economic calendar here.

WHAT YOU WILL LEARN HERE:

  • What is economic calendar?
  • Why is it bad and why is it good?
  • How to use economic calendar?

Economic calendar is a very useful tool and if you want to be good at trading you will have to start using it since no matter what kind of trader you are, it is used for every market(forex, commodities, etc.). It is in such demand because it gives the traders straight news or indicators on what is going to happen in the industry and when is it going to be released. Some of the news are more important the others, usually that is noted. To keep track with calendar is important side when it comes to fundamental analysis and therefore can not be ignored. If you have ever witnesses a reversal on the chart, it was probably due to some important news – that is how much of an impact it does.

WHY IS IT BAD AND WHY IS IT GOOD?

You have to know that this tool can be used only as information source, meaning that it will not teach you how to be a better trader since it already thinks you know how to use it. You have to understand it and use it in proper way for trading. At first it is good that you just look at it and see certain events and check how the market responds to it, the more you will know the better you can actually trade. Try it on demo account first. This way you prepare for the market.

HOW TO USE ECONOMIC CALENDAR?

Anything you trade, any asset, let it that be currency or commoditiy, you have to be able to read the news and interpret it. Let us take a look at one example on how you can use economic calendar at your advantage and potential profit at the end. In this case we will take a look at GBP/USD pair and perform binary option trade.

From the picture below we can see release of a news that is interesting, which is boe inflation report. This report has been in downtrend for GBP from the start of financial crisis in 2008. The effects of that are still here and therefore the economy situation is not looking bright for british pound, therefore we decide to make a PUT on this trade in our prefered binary options broker.

FINALE

Economic calendar is something that is a must have as you can see. It can help you soo much when it comes to trading, so start following it. We have one available for you to use it here. If you are a beginner i would suggest to follow few of the events very closely and see what happens. This way you ensure to know this for next time.

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