Trade Binary Options Like an Olympic Athlete
As many of you may know, weighted and accurate binary option strategy is an “alma-mater” behind profitable trading. Not only this rule applies to Forex and Stock Exchanges, but as well to binary options, no matter how simple and user-friendly it strives to be.It goes without saying that every successful binary option trader should invest little time and effort to learn the basic foundations of financial markets and only then proceed with adopting a strategy fully tailored to his or her needs. Some people tend to scrutinize this aspect of trading continuously sifting through loads of sites in search of educational material, and finally sink under the pile of incoherent and unnecessary knowledge, while others take it simple and learn the basic foundations upon which the market is standing and finally bring it to their advantage olymptrade.
For example, some market assets are inversely correlated with each other. It means that when one asset is going up, the other is going down, or vice versa. The brightest example of such relation is the correlation of U.S. dollar and gold. Both assets have been hostiles for as long as the market exists and share a huge history of disappointment and delight. To say it in simple words, Gold is rising when USD if falling. Gold has always been a hedge in times of recession and elevated economic uncertainty. One may remember the times of Global Financial Collapse of 2008-2009. No matter how devastating it was for the global economy, it saw the biggest surge in Gold ever recorded – Gold rose from $680 to $930 in a matter of 4 months from October 2008 to February 2009, and intensified its upside march over the next 2.5 years until meeting its all -time high at 1920.740 in September 2011. Here comes the question how an average binary option trader can benefit from all this? The answer is simple – by using market pull strategy.
This theory is grounded on statistical assumption that directional movement of one asset exerts influence on the movement of another one. For instance, some commodities are heavily dependent on currencies. Gold relies on dollar acting as stable protection against inflation. So when, for example, Federal Reserve speculates about further easing of monetary policy, it provokes rally in Gold because monetary easing devalues the currency by supplying more money available in the circulation. Another example is Canadian Dollar (CAD). It is hugely dependent on Oil. So when oil is on the rise, so does the Canadian Dollar or Vice Versa. The same happens with other commodities priced in certain currencies such as Australian Dollar, which tends to get a boost when price of Gold is going up. The afore-mentioned makes for the creation of reliable binary options trading strategy which has made thousands of binary options expire in the money. For example, you see that the price of Gold is 1.550. You want to purchase a $100 binary option with 1.5 hour expiry time. Beforehand, you look at the economic calendar and see that there are some events coming from the United States which have proved to have a decent impact on the currency valuation. This may be U.S. Non-Farm payroll, an indicator which shows how many new jobs were created in the United States within the last month. Or trade balance, which shows the difference between imported and exported goods. As the results are published, you purchase one OPTION on Gold, and another on any USD-related currency pair, such as USD/CAD or USD/CHF. In the majority of cases, if time and values are chosen correctly – both options will expire in the money granting a double profit to the trader. For example, with $100 initial investment and 85% payoff on each of the options you get $170 profit, which means $85 for each successful position.
What the aforementioned implies is that some profitable binary options trading strategies can be adopted in light of important events which are bound to exert significant influence on the market. Be it financial, cultural, and sport or military – each type of event has proved to have an impact on the market creating exciting binary option trading environment in the process. For instance, Olympic Games have always been associated with increased activity on the market. The public resonance caused by news of certain country winning or hosting the event may result in the boost of sentiment on the market, as traders, being people driven by emotions will execute trading activity out of joy and delight attributed to the fact that their country is participating, or even hosting the event of international significance. Thus, the event of such scale will impact the economy of not only the country which is hosting it, but evoke huge drama in all the countries whose teams are participating.