Meta: The economic calendar tool can help traders track important news releases that might impact the price movement of their favorite assets. Learn more.
To achieve success in the dynamic and unpredictable world of binary options, traders need to at least understand why the market is moving in a certain manner and they should be able to anticipate these moves. One of the major catalysts of price movement in the market is economic data releases and traders can monitor such data by using the economic calendar tool. This tool helps traders track economic and political news releases that might impact the price movement of their favorite assets. It does so by helping traders know the specific scheduled times for news releases and the actual data releases in real time. If you want to trade binary options effectively, an economic calendar needs to be included in your trading tools.
Where Traders Can Find an Economic Calendar
There are many online reputable sites that offer the economic calendar tool online for free and traders can take advantage of them. These sites include Forex Factory, Bloomberg, Financial Times and FXStreet. There are also many binary options brokers that offer this tool for traders. Banc De Binary is one of them and they offer their clients, for free, an informative and simplified economic calendar which all types of binary options traders can use and interpret with ease.
The Banc De Binary Economic Calendar
The Banc De Binary economic calendar is one of the best of its kind in the industry. The tool lists all the news scheduled to be released on any given day or week. The news items are also rated using a 3-star system. News rated ‘1-star’ is likely to have little impact on the price of the underlying asset whereas a ‘2-star’ rating indicates that the news is likely to have medium impact on an asset’s price. A scheduled event rated ‘3-star’ is expected to have a huge impact on the price behavior of the underlying asset. With this type of categorization, a trader is able to trade binary options more accurately and to make informed decisions regarding the direction that the price of an asset will move.
The tool also has the previous reading of any particular event and the experts’ forecast. The current actual reading is also updated in real time. The Banc De Binary economic calendar also gives traders more background information related to a particular news release. Traders can learn the importance of the news released, how it is measured or computed as well as the frequency of its publication. Additionally, the tool also informs traders of the usual effect the expected news release has had on the underlying asset. The economic calendar from this binary options broker can help traders to get the most out of event trading.
Indicators Used in the Economic Calendar
The economic calendar contains numerous indicators but traders should pay attention to those that are likely to have a huge impact on their favorite assets. In most cases, economic data relating to the US dollar (USD) usually has the most impact on prices of most tradable assets. This is due to the influence the United States, as well as its currency, has on the global financial markets.
In this regard, some of the most important indicators traders should watch out for include:
Gross Domestic Product (GDP)
This is the most influential and widely quoted economic indicator. It represents the market value of all goods and services produced by the economy of a particular country. The preliminary US GDP figures are usually released 4 weeks after the end of a quarter while the final release is done 3 months after the end of a quarter. This figure is very important to traders as it helps them understand the fundamental strength or weakness of an economy.
Consumer Price Index (CPI)
The CPI covers the prices of the most common goods and services bought by the majority of US households. The CPI is a very important tool because it serves as the main benchmark for inflation. The Federal Bank also makes most of its decisions based on the CPI reading. For this reason, traders should watch this data as it will most likely impact the asset they are trading.
Trade Balance Report
The US trade balance report is usually released around the 19th of every month. It helps traders establish the health of the US economy as well as its relationship with other world economies. This is an important indicator because binary options traders mostly trade currency pairs and this report can help them understand the relative strength of different currencies based on the dollar (USD).
Acting on the Information from the Economic Calendar
Economic and political announcements usually impact the prices of underlying assets significantly within a matter of seconds. Using the economic calendar can help a trader react quicker than others to these news releases. On the trading platform provided by a binary options broker, traders can trade the events using trade contracts such as:
Double Touch Options
These contracts have two barriers levels and they payout when either of these prices levels is breached before expiry. These options are the most ideal for trading high impact data because they are non-directional and will payout as soon as one of the price barriers is touched or breached.
One Touch Options
These contracts have one barrier level and they payout when that price level has been achieved before expiry. They are ideal for when a trader has a view on what impact an expected news release will have on an asset’s price directionally.
Double No Touch Options
These contracts have two barrier levels, but they payout when neither barrier is breached before expiry. These contracts are ideal for when a trader expects that a particular news release will not cause much volatility, and that the asset’s price will likely be contained within a price range.
Final Word
The economic calendar is a very vital tool for binary options traders. It can help them boost their profitability by exploiting trading opportunities arising from scheduled economic data releases.
