Trading binary options can be a good extra income if you take the time and effort. This applies to both technical and economic analysis. "Economic nature" does not necessarily mean that one has to study extremely long company or country balance sheets. Since binary options trading is rather short-term, detailed fundamental evaluations are out of the question anyway. But what can definitely be used are certain events that are economic in order to gain an overview of the current situation.
Economic indicators and monetary policy decisions
In addition count primarily the publication of economic indicators and monetary policy decisions. Ultimately, monetary policy decisions in particular are based on an economic valuation, and even more so that monetary politicians have the means to exercise influence. So what could be better than an authority that takes over the evaluation for you and determines the direction? A little tip on the side: it is even better if monetary politicians announce certain decisions in advance. If you can reasonably assess the markets and their dynamics, such announcements can be viewed as a free ticket. You just have to learn to use them.
EU: Again, we had disappointing data from the EU. The unemployment rate remained at 11.5%, inflation also hardly developed in the past month and remained at the same level as in the previous month at 0.3%. Unfortunately, the ECB's measures are not yet bearing fruit. Accordingly, this week is characterized by uncertainties, primarily due to the ECB's decision on further measures to get inflation under control. However, the markets were unable to interpret this with certainty and remained volatile.
USA: Declining home sales from the USA and falling manufacturing index. With the non-farm payrolls, the important US labor market data is coming up again on Friday. Declining numbers are expected.
Technical assessment of the markets:
Now we come to the visual and often more interesting part for short-term traders. Namely the technical evaluation of the markets with the help of market technology. As I said, the monetary policy team held the ECB meeting again this week. From our point of view, what was decided here left the market participants somewhat confused. Draghi puts on an ABS program that most people already knew about. The market participants were not necessarily smarter afterwards.
Eur / Usd: We are honest, the situation is currently somewhat uncertain. The screams from the media after a correction in the Eur / Usd are getting louder, especially against the background that the US labor market data may be negative. This week, the US dollar was definitely weak. Technically, on a 4-hour basis, the chart shows us that the downtrend is still intact. Since we are unsure of what it currently looks like and what the data will look like, you might consider buying a call option if the trend breaks up if the data is really negative.
Gbp / Usd: Despite the weakness of the US dollar, the British pound appears to be even weaker. 90% of all profits made in the course of the referendum have now been given up and there is no end in sight. However, we would be careful about put options. It is not uncommon for exaggerations to be almost completely corrected before it goes back in the same direction. At the very least, it might be a consideration to buy a short-term call option around the low or to continue to bet on falling prices if the low breaks. However, as the current dynamics are, the second variant seems more likely to us.
Usd / Jpy: The currency pair Usd / Jpy correlates very positively with the US stock indices. The statement by the Japanese officials that they would not tolerate a weak yen strengthened the yen against the US dollar this week. Also from a technical point of view, but not visible in the 4-hour chart, the currency pair is at a relevant resistance on a weekly basis. If you are a little more risk-taking, you could use the current pull-back to buy a put option. We are rather careful this week.
Gold: And last but not least, a look at gold. As part of our analysis last week, we presented the option to buy a call option on gold if the downward range breaks. However, this did not happen. The analysis continues, although, in our view, the gold price is currently tending sideways rather than down.
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Some final remarks
Even if binary options trading is based on market technology because of its If short-term is preferred, traders should not forget that the majority of courses are not made by them. This is particularly noticeable in weeks like these, when economic indicators and monetary policy generate a degree of uncertainty. We are certain that, especially in times like these, traders will largely lose money after market technology, because market technology needs stability to function. However, stability is only given if the direction can also be determined more economically. So don't make the mistake of ignoring these factors, good luck!