How to trade on financial events?

Binary Options markets have become accessible more than ever before. Born only a few years back, Binary Options has carved its way in the daily life of people. Traders are slowly moving from the traditional medium of trading, which is Forex and looking for more trading opportunities in the field of Binary Options.

Binary Options offer opportunities for both short-term and long-term traders. Undoubtedly, trading has been divided into two parts, where traders have their own choice of choosing whether they want to trade within a short-term or long-term period.

The short-term trading refers to a lucrative system of trading, but what looks lucrative is also risky. A short-term trade can last from minutes to certain days. Here traders need to focus on strategies and understand the risks and rewards of each trade.

Spotting good short-term opportunities can be a hassle but at the same time traders should be able to protect themselves from unforeseen events. On the contrary in the long-term, trading can be held for an extended period of time, unlike the short-term. The short-term trading remains the most sought after style of trading.

But what can help during short-term trading?

Financial events are one of the best tools that can be used to defy the existing difficulties in the field of binary options. Many markets respond to financial events but these news are not only pertaining to the U.S. but also from around the world. Traders can use these financial events to rightly calculate their moves on the market. That is why, speculations as such, can be extremely beneficial for those who use these financial events specially in a short-term trading. Short term trading create a lot of volatility and these financial events create instant opportunities.

Everyday almost seven to eight major economic data (Financial events) are released in eight key countries which affect the cycle of the global economy as a whole. There are many traders who prefer to trade on financial events as there are a pool of opportunities that follow. One good example can be of Greece debt problem:

Greece entered in an unsettling debt problem for years now, which entangled the new government as well. at the same time, around 3 bailouts were allocated to the country so as it find new methods to dispose of its debt problem. Every time, a bailout reached to its deadline, it created many trading opportunities, becoming then a super financial event.

Impact of the constitutional revolution

Why a financial Event?

If Greece had failed to prepare reforms for its bailout, it created trading opportunities as it would create a lot of volatility for the Euro. Many times, such opportunities are looked for so that it helps to generate better profit making occasions pertaining to the situation prevailing. Normally trading on financial events create more trading opportunities mostly on currencies. Some of the currencies directly impact markets which are:

1.U.S. dollar (USD)

2.Euro (EUR)

3.British Pound (GBP)

4.Japanese Yen (JPY)

5.Swiss Franc (CHF)

6.Canadian Dollar (CAD)

7.Australian dollar (AUD)

8.New Zealand dollar (NZD)

Currencies that can be traded belong to key economies around the world. Traders might take into consideration which economic releases they want to pay particular attention to. The economic news however can be used for trading other assets, other than currencies as well. Therefore grabbing the right information is the key to success here.

If traders have been following the actual trend on the market, they must have noticed that the U.S. dollar has been maintaining quite some strength on the market. Most of the economic releases pertaining to the U.S. have a considerable impact on the market.

The Key Financial Events

Moving on from the basics, it is important to grasp that economic events sometimes give better indications than technical analysis. This may sound a little hard, but pay attention to the outcomes while using financial events, they are incredible!

For any country, there exist certain categories of financial events, which hold an extreme importance on the market. They are:

1.The Non-Farm payrolls - (Only for the U.S.- releases every first Friday of every month)

2.Retail sales

3.Interest rate decision

4.Employment and Unemployment rate

5.Consumer confidence surveys

6.Trade Balance

7.Industrial Production

8.Manufacturing sector surveys

Conclusion

It should be noted that due to volatility created on the market, the relative importance of the releases many change. Certain financial events may hold more importance than other events. Traders should keep an eye on what the market is focusing on. IF unemployment rate is more important than interest rate decision, then the whole scenario of trading might change. Everything depends on what is more trending now.

Once a news ( financial event ) is released, the market might take some time before reacting to the news and the event could also have long lasting effects ranging from hours to days. Prone to short-term movements, the market reacts to events fluctuating around the world.

Warren Tancredi By: Warren Tancredi
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