Listen All Binary Options Traders, Learn Your Fundamentals!
In April 2013 a survey revealed that global Forex market volumes increased from the previous $3.97 trillion per day (April 2010) to $5.34 trillion per day, Wow, do you know how many zeros a trillion has because I had to look it up J. Twelve and it looks like this: 1,000,000,000,000. I know this survey doesn’t refer specifically to the Binary Options market but it is clearly showing an increased global interest for the financial market and Binary Options are a part of that.
Ok so what do those numbers mean for us? First it means that we are in a high volume business, with a huge daily turnover and if we can trade right, we will probably get a piece of that big pie. Secondly, it means that we are up against some serious competition because just like you, everybody else wants that piece so you have to be on top of your game. To get to a level where trading brings you enough income to make a decent living, you will have to mix technical analysis with fundamental analysis. The technical part is covered in numerous of our articles, but what about the fundamental part? Well, that is composed of the world’s political and financial events that influence the market and, of course, our trading.
What’s the Influence of Fundamental Events?
A fundamental event can change the direction of a pair, a stock and even a commodity because the economy of a country is what fuels its currency and has a high impact on its stocks and indices. Needless to say that you must be well informed about what happens in the world and especially in the countries whose currency or stocks you are trading. Let’s assume Mario Draghi (President of the ECB) makes some comments about the bad state of the European economy saying that more member states will soon be in need of monetary aid. This will almost immediately weaken the European currency and it will directly affect the EUR/USD pair by taking it lower. Of course, this will probably bring your EUR/USD Put into profit territory and your Call in negative so you can see why it’s important to be aware of such events. However, speeches of the heads or Central Banks are not all that matters; there are other important fundamental events such as Retail Sales releases, Consumer Price Indexes, Manufacturing Indexes, Non Farm Payrolls, Unemployment Rates and of course, Interest Rates.
Although we have no way of knowing the result before the data is released, we can at least prepare for it and create a plan about how we are going to act once the news is out. To do that, we must know the exact time of the announcement and the way to do it is by following a Financial/Economic Calendar. A lot of websites offer this type of calendar so it will be pretty easy for you to find one. But not all these Calendars explain the impact of each event and you may get lost in abbreviations such as CPI, PPI, PMI, NFP and others; even if the events are not abbreviated, it’s hard to know for each one if a higher number will take a pair up or down and that’s where BOTS can lend a hand.
How to Follow Events?
In the beginning of each week we post on our homepage information about the most important events ahead and tips on how to trade them. Furthermore, our experts are always available on our Forum and keep you updated on the latest news and developments; live news is also available on the CommuniTraders platform so you have all the tools necessary to make an informed decision. Whatever you do, don’t trade before an important event is released because that resembles gambling more than trading as nobody can know the outcome beforehand.
An Informed Trader is a Better Trader.
Being aware about when the next potential market moving event is released is mandatory because it will give you the possibility of creating a plan for your trading. You will be able to choose whether to trade or to stay on the sidelines, giving you more control. However, all the knowledge required is sometimes overwhelming and it’s acquired over time. That’s why we don’t want you to trade alone and we try to explain all the major events before they happen (or immediately after if something unscheduled happened). This way you can benefit from our accumulated knowledge while you learn to interpret Binary Options events on your own.
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