How to Trade the News with 60s Binary Options

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Video Transcription

Welcome to the fifth lesson of the News Trading and 60 Second Option Course. In this lesson we’re going to teach you step by step how to trade the news with the 60 second expiration options.

Let’s go to the economic calendar, and let’s see what event we have today. The most important event today was the interest rate decision in the United States.

Now let’s assume that this event has not happened yet, and we are 10 minutes away from the release of the decision. What you do is you go to your charts, and you go to the . . . well first to the one hour timeframe, and you put on your levels, your overall levels, your overall levels, so support. Well this is resistance, and your overall levels of support. Okay?

Now let’s assume that this has not happened yet, so let’s put a horizontal line where price action has not happened yet, or where we are right now. This is what the chart would have looked like before the announcement of the interest rate decision other one hour chart. And the reason that we are using a horizontal line is also because when we move to the one minute chart it will be easier for us to find the correct time in our charts.

So we go to the one minute chart, and we just scroll all the way, all the way back to find the actual horizontal line that we drew. Okay, so this is the line that we drew, and now the only thing we need to do is to draw support and resistance levels on the one minute chart. You need to use also horizontal lines, but please color them with a different tone, because you don’t want to make the mistake of thinking they are larger timeframe support and resistance. Remember that the support and resistance on the one hour chart is much, much stronger than the support and resistance on the one minute chart.

The support and resistance levels on the one hour chart are going to be used as front tiers on our trades, and the support and resistance on the one minute chart are going to be used as triggers.

Now let me explain this to you. The levels that we have drawn here is this level of resistance which has been listed as support, and another level of support would be right here, I mean, this level looks like strong support, because it has been tested once, twice, this is just a fake out guys, and it has been tested here as resistance. We can draw these lower levels of resistance when price broke to the downside and tested it back, and we can also draw the levels of support right here at the bottom.

And now we just wait for the announcement. If you have two monitors, you can put your calendar on one monitor, and your chart on the other. But if you don’t so what you can do is just use the one half of your screen for your economical calendar, and the other half for the actual chart and platform.

If you feel that you can do this with two currency pairs, feel free to do so, but for this demonstration we will only use the Euro/U.S. Dollar.

So now that we have drawn the levels, and we forgot to draw the overall one minute level of support here, we just wait for the announcement, and this would have been price action as . . . And we just wait for the announcement, as you can see prices clearly respecting the levels that we draw on the one minute chart.

Now right here the announcement is about to break, and when the announcement breaks, you can see that we have a previous push before the announcement actually comes to the economic calendar, but don’t pay attention to that. I mean it’s just a push previous, before the news, this tends to happen. And when the actual announcement comes on the wires, you can see that price starts to dip very fast.

Now did your first entry, this is, you have to be very quickly here, because your first entry will be other break below this area of now support. Remember guys that this area was tested at resistance once, tested here as resistance twice, now it was broken to the up side, the announcement came, that the interest rate was going to say at 0.25% which is good for the U.S. Dollar, and remember anything that is good for the U.S. Dollar would bring the price of the Euro against the dollar down.

So now that we know this we know that when comes at 0.25, we know this price, the price of this currency payer is going to dip fast, so this will be our first trigger, and we will buy a 60 second put right here at the break of this level of resistance. We will buy another 60 second put at the break of this second level of support. Well remember this level was resistance which would be support, second level of support was broken, so this will give us another trigger to buy another 60 second put option on this currency pair, and this third level will gives us another 60 second put option trigger, and another right here. Okay?

This is the first triggers that we get. Remember that each one of these candles is one minute long. This means that if we buy a put option here, this candle closes here, we would have ended up in the money, and when we buy here, here, and here this candle closes here, and we would have ended up in the money again.

Now remember that we also draw the overall one hour levels of support and resistance. This is the first one, and as you can see, price hits hard this level, and then retraces back to make some kind of dodgy candle, which means that we were correct about this being an important level, because not only us, not only we were looking at it, but a lot of other traders were because we can think that some of them took profits right here, and this is why we get a small correction.

If we get a small correction to the upside, we wait. Remember we only want to trade with this strategy, the side of the actual data. I mean in this case to the downside of the Euro/U.S. Dollar.

Now, after the correction if we get another break below this level of support, we can buy another put option, but the difference here is that we need to take this low. Now let me explain this to you. Price dipped very strongly, then a hit this level, went all the way back up here, and started to dip again.

Now in order for us to be able or to have a valid trigger to continue to buy put options on the Euro/U.S. Dollar, because of the non-change interest rate, this level of support has to be broken, but also this low has to be broken. So the trigger would have been at the close of this candle, because this red candle closes below the low of the correction. Now we have a trigger to buy put options another time, and we would have ended up in the money, because remember each and every single one of these candles is one minute long.

And again here price made another correction, but because we are too far away from this level we don’t have a valid trigger, and then price hits this level, and starts to jump up and down. Our trading session for this release is over when price rejects this level, and continues to the upside.

Now let’s recap what we have done here, we bought one, two, three and four put options if we were fast enough. Remember guys that sometimes you will not be fast enough to buy all four put options, and I had assure you that not most of the times but all of the times you will not be able to buy all of your triggers, but if you bought this one, this one, and this one, it’s good, I mean it’s a start, okay?

And then you have to pay attention, because not only the first move will give you triggers to buy your 60 second options, but the corrections on the overall levels, or on the bigger timeframe levels of support are in resistance, will give you triggers to buy 60 second options for a continuation to a move down.

I mean this correction could also be a trigger for you guys, but with a system that is so focused on short-term momentum and breakouts of levels, you need to be closer to a level. I mean, here we are six [peeps] away from the actual level of support. I think that if we were four or three peeps away from it, it would be a good entry to wait for this correction and buy a put option when we close below this low, but this is basically how you trade in the news with the 60 second option with this strategy.

If you have any questions about it, just contact us by email and we’ll be happy to get back to you with an answer.


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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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