Hirose News|October 20, 2014 9:00 AM

Some announcements that may impact the markets this week

Big news for this week!

See Hirose News further down the page: stripping Binary Options down to bare basics.

Below are some announcements that may impact the markets this week:

(All Times are in GMT)

News Event Analysis

On Wednesday (08:30) the Bank of England' Monetary Policy Committee (MPC) will be voting on setting interest rates.  At 09:30 the BoE minutes are published - this gives flavour to the policy discussion and includes differences of views.  Trading this type of decision carries risks along with the usual profit potential.  The Minutes, however, can give traders an edge to determine general direction.



Binaries - stripping down to basiscs.

Last week I talked about the basic principal of Binaries.  This week it's a tiny bit of maths and how you can see your required win rate to be profitable.

The Payout Potential

With Binaries you generally know all the variables of the trade except the actual outcome of the trade itself.

You know:

1. The potential risk (loss) of the trade
2. The payout percentage of the trade
3. The amount you will make when your trade is correct
4. The amount you will lose when your trade is wrong.

You can then calculate the Required Win Rate to make consistent profits.  This can be calculated as a percentage.

T = R / (R+P)

Where T is the Required Win Rate, R is the risk and P is the Payout Potential.

So, if you risk a $1 trade and the Payout Potential is 80%, when you are correct you will receive $0.8.

T = 1 / (1+0.80)

T = 1 / 1.80

T = 0.55 or 55%

This means if every trade had a Payout Potential of 80% you would need to have a strategy that has a Required Win Rate of above 55% to make a consistent profit.  That's just over half the trades you make need to be correct for you to make a consistent profit.


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Happy trading!

The Hirose UK Team