In order to trade binary options profitable, knowing how to open deals is not enough. It is also necessary to have the skills of the market’s forecasting. Binary options’ analysis methods can be conducted both in the context of the economic state in the certain state and in the context of a chart.
Binary options analysis methods: fundamental method
Fundamental analysis is a forecasting method in the context of economics. It is natural that this method suits only those who have certain and deep knowledge in this field. The main point of this method is in the detection of the long-term trends in the certain economy and determination of the future currency rate based on these trends.
Of course, as with any other type of analysis, the fundamental analysis has its own tooling, which is fairly broad and variable. Firstly, it comes down to the macroeconomic statistics, which is regularly published in the special economic calendars.
It is important to understand that fundamental analysis is the work with the entire data spectrum to detect certain economic trends, and it is not the work with the only one news. However, many beginners in the trading interpret this type of the market’s forecasting as working with the one news only. They think that if they open a deal before the certain news issuance, then they are trading using the fundamental analysis. For this reason, many beginners in the trading think that the fundamental analysis is useless in working because often a reaction to the news can be inappropriate from the logical standpoint.
Such binary options analysis methods like the fundamental analysis are the long-term work. But it is wrong to think that it is useless for those who use the technical analysis and trade in the short-term. In fact, detection of the general market’s trend wouldn’t go amiss for anybody.
Binary options analysis methods: technical analysis
Analysis of the underlying assets’ movement using a chart is called the technical analysis. Traders who use it think that a price already includes the fundamental factors. In addition, it is conducted based on a fact that the certain formation on a chart has already occurred in the past.
Based on this idea, binary options analysis methods, including the technical analysis, can be conventionally divided into two methods: chart and quantitative. Chart method studies different patterns that appear on a chart occasionally.
All these patterns have the certain rules of formation and help a trader to determine the future market’s movements based on signals that they set during the process of their formation.
Quantitative method of the technical analysis assumes the usage in trading of the so-called technical analysis indicators that are based on a different mathematical algorithms. These indicators can be of different types and can show both continuation of a trend in the market and possible reversal of the market in the nearest time.
Therefore, the binary options’ analysis methods can be of two types. Each of them is interesting in its own way. You don’t have to think that one of these methods is useless for the market’s analysis. In fact, both of them can be equally successfully applied in the trading. And they can be applied not only separately, but in the conjunction too. Those who manage to combine these two methods of the market’s forecasting simplify their work with binary options substantially. This is because they have an opportunity to conduct the complete analysis from the both economic and chart standpoints.