Plan Trades Based on the Economic Releases to Come

When trading binary options, and not only, this being valid for the currency market as well, one needs to plan the trades based on the economic releases to come. In order to do so, the following steps are necessary:

  • choose the asset (currency pair);
  • look for a first tier economic release to come;
  • look in the economic calendar for the release time;
  • if actual > forecast = usually is positive for currency;
  • buy calls if the asset you are trading is based on that currency (e.g. Gbpusd if retail sales come in better than expectations);
  • buying calls implies one is looking for price to move higher than the strike price, in order for the option to expire in the money.
  • if actual < forecast = usually is negative for currency;
  • buy puts if the asset you are trading is based on that currency (e.g. Gbpusd if retail sales come in better than expectations);
  • buying puts implies one is looking for price to move lower than the strike price, in order for the option to expire in the money.

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