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Complete Technical and Fundamental Analysis

The process of analyzing potential binary options trades should be two-fold, including both research of general market conditions, as well as price movement. These two forms of analysis are referred to as fundamental and technical, respectively. Although they are completed separately, the results of each should be combined in order to arrive at the best possible decisions when entering into trades. The following guide will provide the basics steps required to complete each type.

Let’s start with fundamental analysis, as it is considered the simpler of the two forms. This type of research involves gauging the sentiment of the market for the specific underlying asset that you are considering trading with. The tools required include one or more reliable sources of market news and access to a detailed economic calendar. Daily market news, particularly the headlines of the day, will point you in the direction of prospective trade setups. Whenever an asset is making news, you can bet that the price is on the move. Rarely does a price move substantially without some recognizable driving force being the reason behind the movement.

An economic calendar can also be used to plan trades. This calendar will provide the dates and times of the release of economic data, as well as other important events, such as central bank meetings. It is wise to refer to this calendar at least once a day in order to determine in advance what events may cause asset prices to be on the move. Regardless of your preferred asset group, the release of economic data and financial reports can have a trickle-down effect that impacts the entire market. While you should be focusing on specific assets, do keep general market conditions in mind.

Once you have a feel for the market conditions surrounding your chosen underlying asset, it’s time to move on to technical analysis. The tool required for this task will be a price chart such as MetaTrader, or some similar interactive charting package that provides customization options. At a base level, what you will be looking at is how a price is currently moving, along with how it has been moving in the past. A detailed price chart will allow you to view movement in the form of candlestick, bar, line charts, and more. This can not only help with analysis, but strategies as well.
Get the Trade
There are several types of price action to be looking for when completing technical analysis for binary options trades. The goal is to determine whether a price is volatile, flat, or trending. A price trend tends to provide the easiest profits when trading binaries. It makes no difference whether the price is generally moving higher or lower, both types of movement can be profitable when trading binaries. Flat movement can be profitable as well, so long as the appropriate instrument is selected. Boundary, Range, and No Touch trades are the best selection for this type of price action.

There really is no way to get around the need for analysis. Even if you choose to use signals or trade alerts, you must be able to assess the market on your own. Analysis need not take up a huge amount of time. In fact, the process will become easier and faster with time and experience. If you are new to trading, go ahead and make it a habit to research each and every potential trade. The sooner you get into the habit of analyzing the markets, the sooner your profit totals will grow. Most brokers now provide a variety of educational and analysis tools. These can be used along with tools coming from outside sources to round out your general binary options strategy.

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