Today’s binary option trade was based around a news event that occurred at 8:30 this morning. Once a month, on the first Friday the nonfarm payroll report comes out for the US market. No matter what you are trading, whether it’s binary, stocks, futures, or any asset you should be aware of this news event and to be very careful when trading around it. As a binary trader, we are looking to trade in about an hour after the news has been digested into the market.
Today, the news came out and it wasn’t anything spectacular. We noticed a slight move down and then a solid move up to the resistance line on the EURUSD. Although the price was moving in the direction to the North Side we did see a lot of resistance in including resistance on some of the previous hours candlesticks. This allowed us to take a put option to the South side, giving us a five PIP winner as seen in the video below.
We look for this extended move after the initial thrust after news event. The reason why we don’t trade around the news event is because the news allows the markets to go into new territories. There’s nothing like being on the wrong side of the trade when the release occurs. This trade allowed us to drop-down that hit the original entry. The image below shows how the price completely dropped for a longer put option or even a spot trade giving the trader a big winner altogether.
It is best the layoff from trading if you’re not comfortable trading around any particular news event. There’s no problem with sitting on your hands even though a trade my work that you predicted. You never want to end up in a losing trade and then try to follow it up with double dipping trying to get your money back. Psychologically this can put you in a huge hole and never allow you to get back out. Missing the trade shouldn’t be something that bothers you. Focus on what you plan to do and only trade what you’re comfortable with.
If you have any questions or comments please leave them in the comments section below would be more than happy to help you. Until next time have a great trading day.