Politics effects a country`s business sphere. And as a consequence, produces a significant reaction on its exchange rate. Very often, political developments can significantly push the trading of binaries and CFDs, suggesting the optimal time to open positions.


Events of the first priority for bidding

The essential political developments that can predetermine the economic sphere are

  • Elections;
  • Revolutions;
  • Impeachments;
  • Death of state leaders;
  • Etc.


In other words, it can be everything that may cause any state and globe instability.
 

 


It is impossible to catch the exact moment of data publications, and this is a disadvantage for bidding. A plus can be considered that expert traders with extensive experience can use this data as bidding means at a certain point.

There is no doubt that political developments are likely to push the financial sphere. By the way, this does not necessarily mean that there will be a decrease in the price of assets. The risk can have a positive consequence in the growth of GDP and significantly increase corporate income, which means that the cost of shares will increase.

But in this case, unforeseen actions that will suspend the economic recovery are not excluded. The main thing is the time to catch the difference.

Every bidding agent who wants to make excellent money on binary trading, should be aware of the distinctive features of political risk. Meanwhile, most strategic news does not produce a significant reaction in the main situation on the globe.

Let`s study an example. On the 23d of June 2016, the Brexit referendum took place in the UK. As the result, the British vote impacted both the British economic sphere and the British Pound. The UK`s exchange dropped 10% against the dollar and reached its thirty-one year low on the night of the vote. Investors were selling the Pound investing in to the stronger currencies.

 

Unexpected developments to impact bidding strategy

There are also unexpected developments, not necessarily political ones, that predetermine markets too. They may include natural disasters:

  • Terrorist attack;
  • Earthquakes;
  • Tsunamis;
  • Droughts;
  • Etc.


Remember that the market reaction on the unexpected breaking news is usually much stronger than on the schedule data releases.
 
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