Trading the Bank of Canada Rate Announcement, in both directions, allows you to profit as long as the market moves with binary options. In this video, Gail Mercer shows you how she traded the announcement using a volatility based trading setup.
Bank of Canada Rate Announcement and Binary Options
The Bank of Canada Rate Announcement was set to be released at 10am New York time. Immediately prior to the announcement, numerous trades were placed. Although Gail’s bias was to the short side, Gail also did several long positions because anything could happen. Historically, the Bank of Canada Rate Announcement creates a move of more than 150 pips — making it dangerous to trade using spot forex. However, with binary options and spreads, your risk is limited on entry.
In this video, Gail Mercer, founder of TradersHelpDesk, shows the trades she placed immediately prior to the Bank of Canada Rate Announcement. She had a long spread, a short spread, and more than nine binary options placed in both directions. Her typical risk on these were less than $20 per contract.
The Bank of Canada did increase their rates as expected and, instead of going down, the USDCAD went up. However, because Gail placed both long and shorts, she still ended up with $1200 in profit — after exchange fees. How? Gail limited her risk using Out of the Money binaries.
To learn which market reports move the currencies and how much the markets are expected to move, order Gail’s latest book on Trading Nadex Binary Options Using Currencies. Gail’s book is also available on Amazon.