Any profitable binary options trader will tell you that in order to be successful in the industry, it’s important to have a solid strategy to work with. In fact, the better your strategy, the more profitable you can be. As a beginner trader, you’ll quickly learn that there are several binary options strategies to choose from. As a result, one of the most commonly asked questions I receive is “What is the best strategy for trading binary options?” In my opinion, that strategy is known as trend trading with the news. It’s really a combination of two different strategies, but if used properly, it can be incredibly profitable.
What Is Trend Trading With The News
Trend trading with the news is a binary options trading strategy that combines the trend trading strategy and the news trading strategy. Essentially, one of the first things you’ll learn is that market movement tends to happen in trends. Therefore, by following trends, you’ll realize that there are several opportunities to take advantage of. However, trends are born from news; which is why many traders utter the words “the news moves the market” quite often. Therefore, the trend trading with the news strategy is the process of following the news that cause the trends and taking advantage of the trends for profit.
What You’ll Need To Employ This Strategy
To employ the trend trading with the news strategy, you’re going to need two things…
- Economic Calendar – First and foremost, it’s important that you know about the news events before they happen. Therefore, the economic calendar is an incredibly important tool. Economic calendars are offered by just about every major financial news outlet for free. They act just like regular calendars. However, there is one difference. Economic calendars list the events that are going to happen that are likely to cause movement in the market.
- Candlestick Charts – Candlestick charts make trends easy to find and follow. These are also provided for free through most major financial news outlets.
How To Employ The Trend Trading With The News Strategy
Step #1: Find The News – First and foremost, you’ll want to open your economic calendar and read through the upcoming events. These events include job reports, earnings reports, company statements and more. Choose the events that you believe will cause the most movement in the market and make a note of what they are and when they take place.
Step #2: Make Yourself Available – You can’t trade if you’re not available. So, knowing when the events are going to happen, mark your calendar to make yourself available 10 minutes before the event and for a few hours after the event.
Step #3: Map The Trends – Before the event happens, open your candlestick chart and wait for the event. After about 5 minutes, a clear trend will become apparent. Make a note of what the trend is and how strong it is.
Step #4: Trade The Trends – Finally, based on your notes, it’s time to start trading. If the trend is an uptrend, start purchasing call options to follow the trend up to profits. Adversely, if the trend is a downtrend, start purchasing put options to follow the trend down to profits.
I’ve employed the trend trading with the news strategy countless times; and it has been incredibly effective for me. As you can see from the steps above, it’s not very hard to do either. So, what are you waiting for? It’s time to bring up your economic calendar and get started!