The simplest of all binary options strategies are those which are related to fundamental analysis. This form of analysis requires that you utilize market news and reports as a means of predicting the upcoming price movement direction. This form of research is far easier for novice traders to complete, and while it can leave some room for error, it pays to know exactly what is driving asset prices in one direction or the other.
The tools needed for this binary options trading strategy include an economic calendar and one or more reliable sources of market news. A detailed economic calendar will not only tell you when important events are going to take place, but also what the analysts are expecting. For example, should Starbucks be set to release an earnings report in the coming week, the calendar will tell you the date, time, and expected numbers according to market analysts.
The strategy itself is rather simple. Take note of specific data releases, view the expected numbers, and then monitor market reports to see if the data is better than, worse than, or close to what the analysts were expecting. Whenever the data is far from what was expected, be ready to enter into a binary options trade based upon the current price action. Whenever the data is favorable, be watching for Call opportunities. Whenever it is not favorable, be watching for Put opportunities.
The best case scenario is that the data misses the market so drastically that a price trend begins. Remember, when trading binary options you can profit from upward or downward price movement. Price trends are virtual gold mines for traders, as they can allow for a larger number of profitable trades to be completed within only a short period of time. One of the easiest ways to spot a prospective price trend in advance is to simply refer to your economic calendar.
What this binary options strategy lacks is the use of technical charts. New traders may want to stick with the basic price movement chart that is available within their chosen platform. This chart will show how the price has moved over a period of time. Traders who are already familiar with more advanced price charts are advised to use these in conjunction with this strategy in order to have a more detailed view of the past and current asset price movement.
On a side note, expect the price of assets to be rather stable just prior to market reports related to them being released. This often occurs because investors are not making any moves while waiting to see what the data actually reveals. Should you have access to Boundary trades within your binary options platform, this would be an ideal time to use them. However, do be careful to select an expiry time that will complete before the new data is released since it is likely to disrupt the stability.
Some of the best binary options strategies are those that are not overly complicated. This strategy is an excellent example of one which is perfectly suitable to beginners. With some experience, you should be able to add in additional indicators which will render your price movement predictions even more accurate, and in doing so, bring in more profit.
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