Pay attention to the Dow Jones when trading the Nikkei 225 index

The United States is Japan’s main trade partner so binary options traders should regard the Nikkei 225 and Dow Jones as an indissoluble pair rather than separate entities

Those who don’t mind adjusting their schedule to match the Japanese trading hours could make a lucrative business from trading the Nikkei 225 index. This is the stock exchange of Japan and just as the name suggests includes 225 of the most successful companies in the country. They span over different industries and most of them have tight bonds with the Western markets, more precisely with the United States. This is why any respectable trader should pay attention to what happens in the US and more watch closely in which direction the price of the Dow Jones is heading.

A mirror for the Dow Jones

Japan is mostly an export oriented economy and the most important market for Japanese products is the one in the United States. This explains why the ties between the two economies are so close and why any slowdown affecting the US economy sends shockwaves across the Pacific Ocean. The Nikkei 225 is heavily influenced by such movements and the best way of understanding the direction in which the index will move is to look at the Dow Jones .

It makes no difference that the Japanese stock market is the first to open on a trading day and that Nikkei 225 is traded first, because it is highly dependent on the American market. Basically, it reflects the performance of Dow Jones so if this index suffered in the previous day, it is very likely that Nikkei 225 will also struggle in the opening hours. One piece of advice that any binary options trader can benefit of is to wake up early or stay up at night, depending on location and trade Nikkei 255 at the market open.

Use fundamental binary strategies when trading Nikkei 225

A crash course to trading the Japanese index will recommend players to take a close look at what happened to Dow Jones in the previous day. It is not a flawless plan but it works more often than it fails and with proper bankroll management and a simple martingale strategy adjusted for binary options, it can lead to profits. The first half hour is the most important one, so traders should set their options to expire no later than 30 minutes after the market opens.

Fundamental analysis is hard to master, but if you plan on trading Nikkei 225 for a longer period of time, don’t hesitate to invest a lot of energy and time in understanding the connections between the two economies. Among the most important news releases, the Non-Farm Payrolls report, the US retail sales and the US GDP report have a special place, because they give a glimpse into how the US economy fares.