Trading Binary Options To Trump’s Twitter Feed
Most institutional traders are now required to watch Trump’s Twitter feed very closely. The reason is that his comments, contained in short and often quite direct tweets, have the power to move the markets as they often do.
Trump opened up a a channel for communication which no president has ever done before him. All his predecessors made official speeches or used the official media channels to express their views. Everything was very much controlled.
Trump seems to prefer to fly solo and use his Twitter account to express his views, be they political, economical, or sometimes even personal. It seems like the president of the USA does not want to use any filter and many people like this direct contact.
How Trump’s tweets can move the markets
Of course not all Trump’s feeds move the price of assets, but there are some that definitely do. Trump is known for his quick response and he tends to follow through on his statements, at least most of the time.
It’s not surprising his tweets move the markets, they reflect the views of one of the most powerful man in the world. So when Trump mentions a company or a new regulation, his opinions suggest a certain type of action which he will take and traders see this as a trading signal.
Here is an example of Trump’s tweet about the Boeing corporation:
And here is the market reaction to Boeing stock soon after this comment on market reopen:
Trump made his comment after Dennis Muilenburg, the Boeing Chief Executive indirectly criticized Trump’s trade policies. Whether deserving or not, this was a great trading opportunity for someone who knew how to trade it. Since Trump signaled the cancellation of a government order, traders knew that Boeing stock would suffer some considerable losses.
There are of course other similar examples of Trump’s tweets which moved the markets enough to even trade the High-Yield Touch options where profits can reach up to 300%.
Not all Trump’s tweets are negative. There are some very positive ones that have the tendency to move stock prices up.
For example, his mention about Ford on the 4th of January moved the company’s stock price up a whooping 4.6%. That is a bog move and it only took one day.
Here is the tweet that did it:
And here is the result of this tweet clearly visible in Ford Motor’s stock price spike:
Again, as in the previous example, this move was substantial enough to reach the levels of a High-Yield option and gain well over 100% return.
The price of Ford Motor stock has returned to previous levels a day later.
How to trade Trump’s tweets in binary options
The great thing about binary options is that you can trade company stocks, currencies, indicies, funds, and commodities, all from a single online platform. That allows for greater flexibility and more choices of assets that are directly influenced by Trump’s tweets.
Although, as seen in both examples prices tend to jump and playing the High-Yield options could produce a great return, it may be risky to choose this particular option. If you’re unsure that the levels of High-Yield options can be reached than it’s best to stick to regular options where the return is still very high. (I consider a 70% return to be very high.)
If you choose to trade a regular option with 70-85% return, you will have a greater chance of winning.
Timing your trades and setting expiry times
In binary options, the right timing is crucial. As we could see in the above examples the stock prices moved considerably throughout the daily trading session. If you had entered the trades soon after Trump’s tweets (when markets were opened) with an expiry of 3-12 hours you’d most likely win in both cases.
However the best way to trade Trump’s tweets is to monitor the underlying asset on H1 charts to see how it’s performing and then place your trades accordingly.
Brokers can’t adjust platforms to Trump’s tweets
Many brokers set certain limits on the orders and their trading platform during very influential market releases. Sometimes they increase the margin levels or simply add a temporary delay to the order taking so that when you enter a trade it always seems a bit late before it is actually executed.
Many users have noticed this and there are plenty of examples on binary option forums were frustrated users voice their opinions. Brokers argue that the delay is often due to the sudden rise of orders and technological capabilities, or they simply argue that there is no delay or only minimal.
The exact times of influential economic releases and speeches are known to the brokers because their times and importance is clearly defined in specialized economic calendars. See example below:
Events with three bull icons next to them are the most important ones and they usually influence the price action of the underlying assets. See live example here.
The great thing about Trump’s tweets is that they cannot be monitored, as they are quite spontaneous. In addition, traders often don’t have to trade on the asset as soon as the tweet is out. They can wait and trade at anytime after the tweet which makes it impossible for brokers to control.
Few final words in conclusion
As an investor and trader, one always looks for a good signal and trading opportunity that can produce good returns. That’s obvious. Many subscribe to professional signal services to receive trading alerts. To know what moves the market is important for any trader.
Trump with his direct Twitter approach makes things a lot more interesting for an investor who is always on the look out for a good trading signal. Monitoring Trump’s twitter feed can give you a heads up and point you in the right direction.
The great thing is that Twitter is free to use and you can receive the exact same ‘trading signal’ from Trump as the most experienced institutional fund traders, and also at the same time as they. That’s a huge advantage.
Now instead of just reading about Trump’s latest shocking tweets in the news you can actually act and make money on them, before journalist even publish their stories and it is already too late.Published in Free Strategies