This theory is grounded on statistical assumption that directional movement of one asset exerts influence on the movement of another one. For instance, some commodities are heavily dependent on currencies. Gold relies on dollar acting as stable protection against inflation. So when, for example, Federal Reserve speculates about further easing of monetary policy, it provokes rally in Gold because monetary easing devalues the currency by supplying more money available in the circulation. Another example is Canadian Dollar (CAD). It is hugely dependent on Oil.
So when oil is on the rise, so does the Canadian Dollar or Vice Versa. The same happens with other commodities priced in certain currencies such as Australian Dollar, which tends to get a boost when price of Gold is going up. The afore-mentioned makes for the creation of reliable binary options trading strategy which has made thousands of binary options expire in the money. For example, you see that the price of Gold is 1.550. You want to purchase a $100 binary option with 1.5 hour expiry time. Beforehand, you look at the economic calendar and see that there are some events coming from the United States which have proved to have a decent impact on the currency valuation.
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