Binary option trading is an activity that is gaining momentum among investors. To succeed in investing, it is important to implement a strategy and perform various analyses. In the world of finance, there are in particular the “economic announcements” that are constantly used for decision-making. The question is whether these news can be used as binary options?
What are economic announcements?
Economic announcements are simply important economic news that can have an impact on the evolution of financial markets. Presented in an “economic calendar“, these can take the form of press releases, figures or graphs. In any case, they illustrate the economic news of the day.
Depending on the source, it is possible to find ads classified by importance, based on their impact which can be low, moderate, medium or high. In the end, traders can then have a small idea of how prices will evolve.
Can we rely on economic announcements as a binary options trader?
Investors should not rely blindly on these announcements, especially since the expiration of binary options is quite short (sometimes in the order of a few minutes). It is therefore difficult to make a reliable forecast based solely on economic news. It remains essential to combine them with other tools, graphs and others to be sure to take the right position or to follow the news highlighted by brokers such as Interactive Option or AnyOption.
A risky strategy
It should be remembered that when trading binary options, the investor has the choice between two decisions: the decrease or the increase in the price. Theoretically, it is therefore in his interest to monitor trends in order to make the right decision and rely on economic announcements. Nevertheless, it must be taken into account that the impact of news is not immediate: the trader must therefore be able to react at the right time. In addition, there is always a risk that the impact on the market will be irrational and contrary to the details.
This ultimately involves a significant risk and can be a source of stress. Due to its specificities, the analysis of economic announcements is a trading tactic that is aimed more at experienced traders and is not suitable for beginners. In the end, it is still possible to use economic announcements as binary options. However, it is better to limit yourself to reasonable gains and not take unreasonable risks.