No matter which market or instrument you trade, the analysis method you select will be a big decision, especially on an intraday level. When we talk about binary options, technical analysis comes to the forefront. Fundamental analysis is the other method used by many traders for making their trading idea. Although we look at fundamentals for our trades we always consider technical analysis first. Remember binaries are mainly traded on a short term basis.
We like to use fundamental analysis as a method of looking at the overall trend. In binary options these fundamentals aren’t used quite often. However, knowing what the trend of the asset you plan to trade is can help you determine whether you should be taking call or put options. Since you are not investing long-term with your binaries these will apply as a guide. Overtime you will lean a lot more on Technical than fundamental analysis.
As for technical analysis, this is a critical piece to making solid trades. You must know how the charts are acting and predict price action for your entries. Whether you’re a Forex, Stock, or binary option trader, this is important to know. Technical analysis is universally applicable to future price movement on any asset. The number one way for trading technically is using some form of charting package. On this site we discuss several methods of trading with charts and how to use candlesticks to make our decisions much more clear. We discuss Metatrader charts throughout the site and find it to be the best package for the money. FREE.
In future videos you’ll learn about different technical indicators that are used on the charts. Each indicator is different, however they all have the same common goal. We tend to try to use more price action than anything else on BinaryOptionsu.com. You will learn over time that price action is a picture of price at it’s current state versus historical indicators such as the MACD, RSI or other common technical indicators. Remember, knowing what happened in the past doesn’t necessarily predict what can happen in the future. You must have a clear understanding of how price works on the asset your trading and this will be discussed in future videos.
We will continue our videos on price action, technical and fundamental analysis. If you have any questions please leave a comment below.