One of the most useful tools you will need to get to grips with as a trader of binary options in an economic calendar. Economic calendars are provided by certain online trading resources such as www.fxstreet.com, www.forexfactory.com and www.netdania.com. Basically one of the most pronounced catalysts for movement in the worlds markets is the release of economic information. Economic calendars let you know in advance what data is due to be released, as well as when, and why it is important. So for instance if you are trading on the USD there are several high importance economic data releases to keep your eyes on and many other ones of lesser importance that are also good to be aware of. For the USD two of the most important data releases are Non-farm Payroll (NFP) and Gross Domestic Product (GDP).
Non-farm payroll refers to the number of people employed in the United States other than farm workers; it is a very strong indicator of the economic health of the country and has a very positive effect on the value of the dollar if it comes in better than expected. The same goes for the U.S gross domestic product. So traders will usually begin their trading day by scanning the news for headlines that affect their preferred assets and then use an economic calendar to find out the date and time of the data releases that are due to impact their chosen assets that day before trading.
As we have said in other introductory tutorials about making news reading a part of your daily trading routine, the use of economic calendars is also essential if you want to succeed as a binary trader. Most economic calendars come with customizable options that allow you to specify what currency you are interested in, and what data releases (in terms of importance) you want to look at. We suggest that beginners start with one currency and only look at the data releases that are of high importance to that particular currency. In this way you can get to grips with how these highly important data releases affect your chosen assets and then as you become better able to follow these releases and successfully trade on then, you will be able to begin looking are the other releases of lesser importance and releases for competing currencies so as to have a strong basis from which to place your trades.
The most important thing to remember is that these fundamentals have a tangible effect on the markets; you can literally see it reacting as the data is coming in. So we would advise that as you get to grips with these data releases you also have a real time chart of your chosen asset open so that you can observe how it is being affected before placing any trades. For more information about these types of trading activities see our other articles on fundamental analysis.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.