News Trading Strategies: How it Works?
Every day a lot of economic predictions and news releases are published and many speculative traders are buying and selling the underlying assets based on the news predictions.
For example, if the statistical news about US unemployment rate is predicted to show results that there is less unemployment as compared with previous analysis period, many traders will buy the USD, since lower unemployment rate is good for the national currency. As a consequence, the impact will reflect on EUR/USD pair. As the USD will grow stronger, the EUR/USD Forex chart (for example) will move down.
This is an opportunity for binary options traders to take the speculative trade prior the news release, based on the prediction, or they can wait for the actual release and try to catch the developing trend, as many traders will still buy the USD after the release, if the result has been positive and good for USD.