Generic news strategy: Read economy calendars and place winning trades
News (alias Fundamental) trading allow the most accurate trading strategies available, presumed you know how to trade them. A big advantage is that news are so big impacts, you can see the strong market movement of pasts in the charts and learn easy how to use them. On the other hands do you need to trade at specific news times, while technical indicators fire signals around the clock basing at the asset prices. Read this post to the end to learn, how to trade them right.
What is an economy calendar?
An economy calendar is a powerful tool to give you an overview about soon happen events. These are sometimes simple things like holidays or similar, but mostly it is a date for released news. News cause in very strong market movements, hence an economy calendar is one of the best free signal generators available.
Prepare for news trading
For news trading is a professional chart software strong recommend. The free software MetaTrader is a great solution. It contains an economy calendar, but it is a little hard to read. The best calendar do you find at investing.com. Additional open your broker account in another browser window/tab if you trade direct. After you have created an free account at Penny Millionaire open it too, it is great for getting a second technical opinion.
Read the economy calendar
The calendar is fairly easy to read, it is only a small table. First, don’t forget to change the time zone at the top. Because most platforms use UTC, change it to GMT (Coordinated universal time). Funnily, the English shortcut is CUT while the France is TUC (Temps Universel Coordonné), hence they called them globally UTC. UTC is nearly GMT, but simplified (for example, UTC use leap seconds to follow the uneven earth rotation). You can create a user account at investing.com to save some settings, but this is only a bonus and not necessary for usage.
The first column of the economy calendar show the time, when the news is released in the above selected time zone. You need to be ready at this time. Make sure to don’t trade a half hour before the news release the assets, because the results are sometimes unexpected. At the right of the time are the affected currency, for example JPY, RUB and AUD, beside the flag of the specific land. This is sometimes important if the currency is shared about different lands, for example EUR.
In the middle of the table is the expected impact of the news shown as icon (bull heads). More bull heads means a bigger expected volatility of the market. But sometimes, more than one news release at once. For example come many from Germany (EUR). Take care of this, especially if some are positive and some are negative at same time.
At the right side of the economy calendar are the values: Actual, Forecast and Previous. Actual is the result of the news. Logical it is only available after they released. A positive is green while negative news is red and a neutral one simple black. May uses the Forecast to prepare to trade in a direction, but ignore them for invest decides and wait for the real results. The Previous value is the result of the last news of this type. This value can you ignore.
You can create notifies (alerts) at the economy calendar of investing.com. Use the bell symbol in the last line of the news. They only appear if you hover with the mouse over the line. Take care of holidays, which are showed in the economy calendar too. Don’t trade as newbie news if any affected land has holidays.
Trading news events: The theory
Before we start making money, let first think about why such an event will change the prices. Stock traders buy currencies, when they think the current price is right, while the expected ask price is higher than the current bid price. If anybody buy an asset, the price rise. Vice versa selling trader their commodities if they think the price will not rise anymore (or if it fell already too much). A sell let the price fall again. Positive news about a good looks like the worth raise in the future. This let people buy and the price increment fast. A small problem for beginners is, that this is often a so-called “bubble”. Typical day- and fundamental traders sell their stuff and the price fall down again. If you are new in the binary option industry be only interested in the first raise, the fall is not so easy to trade. Negative news works exactly opposite.
Read the charts for the best strategy
Like mentioned at the begin of this article are the big impacts of past events easy to see at your chart software. This make it possible to train reading the economy calendar of past news. Take a looks and the calendar above and the chart below. While news are very big impacts, you should always look at the technical aspects, a news don’t “overwrite” it. The current greatest software is Penny Millionaire. Check it out and watch the video to learn all you need; then type in account details in the form to create your new free account instantly. Please send an email to [email protected] or use the contact form if you have further questions. Don’t forget to share your strategy results in the comment below to help other traders and join the newsletter to receive the newest binary option news and strategies as soon as possible.