By USDR
Forex and commodities trading are seen as the easiest ways to make money from the financial markets. They’re accessible to all, no matter where you are in the world. You can trade after hours, from the comfort of your home, meaning you don’t have to quit your day job. And binary options platforms have made it even easier. You predict only whether a currency pairing or commodity will rise or fall, no more, no less. But how do you go about making those predictions.
Many binary brokers have come into disrepute and for good reason. They sell binary options as a guessing game, making it no more than a gamble.
Which is why it is so important to find a broker, such as anyoption, that stresses the importance of a live news feed. See, the news is the key to understanding what a trade will do at any given time.
As long as you’re looking at the relevant news stories, you’ll have a reasonable idea of how a trade will perform.
Political turmoil is a major factor
When it comes to Forex and commodities trading, political stability or turmoil are major factors in how a trade will perform. Currencies in particular are connected to a country’s political situation. As soon as a country seems unstable, investors pull out, selling off their currency. This causes demand in the currency to drop, and consequently the price drops as well.
Commodities are also connected to political stability. Gold, for example, is seen as a safe haven for investors, and when world news is chaotic, investors tend to buy gold. The price consequently rises.
Keeping up to date with global news is crucial to knowing which trades will succeed.
Economic stability is hugely important
Of course, political stability or instability is mostly consequential due to how much it impacts the economy of a country. This is especially true when it comes to Forex trading. Economic stability is the biggest factor in whether investors will buy a currency or not. If a country’s economy is doing well, investors will buy its currency to invest. If not, they’ll sell for the currency of a better performing economy.
It’s all down to supply and demand
Whether Forex or commodities, prices rise and fall according to supply and demand. The more investors want something, the less supply there is and the higher the price is. So, when investors want gold, for whatever reason, the price rises. The same is true for currencies.
But supply and demand can have a more direct impact when dealing with commodities. If there is a shortage of a commodity, whether due to natural deficiencies or an inability to attain the commodity from a troubled region, the price will rise. Keeping tabs on these supply and demand factors can be key to making good trades.
Your success correlates with your knowledge of current events
Ultimately, you won’t succeed if you don’t keep up to date with economic, political, and other news. Which is why it’s so important that you find a broker like anyoption that recognises this. Any broker that disregards the significance of the news is just trying to get you to take a gamble.
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