In this section of our guide, we are going to explain few indicators or signals which tell whether the Binary Option trade is moving in one direction or the other. These movements are the result of several factors which affect the stock and share prices, along with the currency values, and one should be equipped with the techniques to judge where the prices are going to move.
Essentially, the skill of judging the direction of trending market is what separates the expert traders from the amateurs. Go through the following guidelines to gain knowledge regarding different Binary Options trading signals.
Currency Volatilities
First, let’s have a look at the indicators that influence the movement of currencies.
Civil Unrest
A country’s currency falls at a rapid rate when there is some sort of civil unrest, and the falling currency rate depends on the duration of the civil unrest. The best way to know about the shifting rates of currencies is to do a little research regarding the civil condition of the country whose currency you are going to use to trade Binary Options online.
Political Changes
Whenever elections are near or going on in any democratic country, its currency is bound to experience some changes. Although the changes in currency are not always negative, as there is a chance that the new elected body will stabilize the country’s economy and inflate the currency value.
Seasonal Changes
Many countries’ currencies increase or decrease with seasonal changes. For example, those countries where summers turn the country into a holiday destination experience increase in currency value.
Stocks and Share Price Movements
The stock and share prices tend to move upwards and downwards depending on several factors during a trading period. Following are the signals that indicate the movements of stock and share prices.
Profit Warnings
After a bad trading period, the share prices of most companies drop rapidly, especially of stores and shops based ones. So be on the lookout for such companies, as trading Binary Options with them might end up in a loss.
Share Dividends
Announcement of share dividends always have a striking impact on a company’s share and stock prices. By keeping a track of a company’s performance, you can make an accurate guess whether the announcement of share dividends will raise or degrade their share values.
Management Changes
Any company where major replacements in the management team have been made is most likely to see movement in its share prices. This is because it takes time for a new management team to completely take over the company’s operations and this imposes mostly negative, but sometimes, positive effects on the share prices.
Commodity Price Fluctuations
This is the final category and it is for judging the movements in commodities and assets which are up for Binary Options trading.
Trade Wars
When two companies compete in regards of pricing of their goods, this mostly results in dropping of their share prices. Similarly, when two countries compete in the same fashion, a trade war starts, and the price of assets such as Oil, rise or fall quite noticeably. This is somewhat advantageous for Binary Options traders, so be on a vigilant lookout whenever such war breaks out, and make the most of it.
Discovery of New Minefield
Although discoveries of new minefields are not common these days, but if a country discovers large reserves of a certain commodity, let’s say Oil, then it will drive down its prices in the market due to the additional output. So keep your ears open and play your Binary Options trade cards accordingly to make winning and profitable trades.
Currency Volatility
Gold is one of those commodities whose variation in prices makes the currencies around the globe volatile. So carefully judge the changes in prices of Gold and similar commodities and make decisions of Binary Options trading accordingly.