In the previous articles we have considered binary options in general: its definition, types, intricacies, and pitfalls. In this section we will start considering binary options trading process itself, as well as considering all related nuances.
Binary options trading as it is
Being a trader is a difficult work. Being binary trader is twice as difficult. Strange, isn’t it? All brokers and relative websites describe working with binary options as a cakewalk to the financial independence. Opinion about the easiness of trading is very popular, but very wrong. Ideas of easiness, quickness, and carelessness are not compatible with the trading at all, as well as with the binary options trading in particular. In the next articles we will once more consider why the majority of brokers and so-called partners try to present binary options as an easy way to become rich. But now let’s consider what the binary options trading really looks like.
So, to make money we have to forecast the movement of the underlying asset’s price correctly. It can be done in two ways: by analyzing the market, and by using the trading signals.
Analysis of market in binary options trading
Opportunity to analyze market is the main difference between trading and casino. In other words, traders don’t have to simply guess the market’s movement; they have to make the logical conclusions from the data received in the market. There are two types of analysis of the binary options’ market:
Technical analysis is based on the idea that the history repeats itself. In other words, using historical information about the movement of the price, you can make conclusions regarding the current state of the market and even the future movements. The main auxiliary trader’s tool with during the usage of the technical analysis is a chart. In simple terms and practically, the technical analysis looks like the constant search for the certain trading signals on a chart in order to enter the market (purchase an option). It is conducted by a trader. We will consider different variants of getting these signals in more detail in the section Technical analysis. In order to make knowledge deeper, professional traders can study our Encyclopedia of binary options’ technical analysis.
Fundamental analysis requires a trader to have economic knowledge and to constantly monitor news in the search of political, economic, financial, and other important changes that can influence the market price of an asset. Major factors that influence markets are publications of data on the main macroeconomic indicators (GDP, inflation, unemployment, and others). Monitoring can be conducted using the specialized Economic calendar. While the technical analysis is used mostly for short- and mid-term deals, fundamental analysis is good for mid- and long-term investments.
As already mentioned, analysis of the market provides a trader with an opportunity to engage in binary options professionally. If analysis tools are not used, the binary options trading turns to roulette. The only one variant when a trade may not use analysis is when he receives ready-made trading signals from the professionals in trading.
Binary options trading signals
Binary options’ signals are very tricky and disputable subject. Perhaps, we have to start with defining what the trading signals are. Generally, we can define them as results of analysis that was conducted by various automated systems (robots) or the more experienced traders instead of a trader himself. In fact, a trader receives information on the movement of the certain asset, in the certain period of time, and in the certain direction. Signals can be free and paid. Of course, the paid once are more reliable signals for the binary options trading.
It is a very convenient tool that is actively advertised by numerous signals’ suppliers. However, we strongly recommend being skeptical about signals. We will consider disadvantages and benefits of signals in more detail in the relevant section of the encyclopedia.
What can be mentioned in conclusion? As you see, the binary options’ trading is not that simple at all. It is more complicated analytical process that requires a trader to have various knowledge and skills. For this reason, we recommend traders to reconsider their approach towards industry and start learning. Our website will help in this matter.
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