Fundamental analysis binary options takes on enormous importance in markets forecasting. It’s one of the methods which helps the trader to realize where the price will move in future? Alternatively to the technical analysis, this forecasting method requires special deep knowledge in the economic field therefore it can't be applied by all. However, it is rather popular in the trading environment.
What is the fundamental analysis
What the sense of the fundamental analysis lies in? It consists in finding the long-term market trends based on the analysis of the current economic situation in this or that state and in the world economy all in all. If the conversation drifts to the equity market, here this analysis type concerns the work of the company issuer of securities.
Speaking about the Binary Options Fundamental analysis it should be noted that the trader can gain all necessary economic macrostatistics from the economic calendar. The most significant events can lead to rather rapid short-term price movements; however they aren't important for the analysis. Short-term price impact helps to earn on options with the small term of expiration. As for the fundamental analysis, it is held for the long-term binary options with expiration terms of a month and above.
Economical indexes for the fundamental analysis
It maybe said that the fundamental analysis has its own indicators. They are the indicators of macroeconomic statistics. However they influence on the long-term price trends only in its erray. The analysis begins only where the trader, on the base of these so-named indicators determines that, for instance, the economy of Japan will grow in the long-term prospects.
Having carried out such analysis and made following conclusions, the trader can buy the long-term binary options, for example on the majors connected with Japanese Yen or indexes of the Tokyo Stock Exchange.
The level of economic development or the (Gross Domestic Product) are the main economic indicators which help to determine a situation in the economy of this or that state.This indicator is stated as a percentage and can be preliminary, current or final, quarter and annual.
The level of employment in the country is one more important indicator of the economy welfare. It can be stated in the number of allowances which the state pays to the unemployed. The higher there is unemployment the worse the economic status of the state will be in its turn. For example, this indicator reaches today 25% in some European states.
It’s very essential to pay attention also to inflation. Inflation indicators in the economic calendar are expressed by the consumer price index and similar indexes. Inflation growth is one of the most serious problems of the majority of the European powers today, and also the USA. However, for example, the situation is opposite in Japan. The government of this state does everything today to overcome a deflation, and «to squeeze prices".
At last data on interest rates which are published by the Central Banks monthly are very considerable for all currencies without exception. After all from the monetary theory standpoint, this indicator expresses the cost of money as store of value.
Hence, the fundamental analysis – it’s the complex of factors which help the trader to forecast future long-term trends at the markets.