To make money with binary options, you need to use technical analysis. Learn all about how technical analysis in binary options can benefit your trading.
From these price movements, technical analysis deducts deep insights that you can’t get with any other type of analysis, insights that alert you to trading opportunities you would miss out on without technical analysis.
When investing in binary options, you have to leave the common way of thinking about investing behind. Where the news and popular knowledge connect every price movement to a fundamental reason such as increased profits, technical analysis in binary options can open your eyes to the simple truth that all price movements on a stock exchange are determined by supply and demand.
Understanding the relationship of supply and demand allows you to make predictions on the short time frames of binary options. On such short time-frames prices move too erratic and random to deduct any valuable predictions from examining earnings, dividends, new products, research projects etc. of an asset.
These movements are the result of random, unpredictable events, where some traders are currently buying and others are not. Therefore, fundamental analysis is not adaptable to binary options. The only way to become a successful binary options trader is to use technical analysis.
With technical analysis in binary options, you will be able to make profits of up to 90 percent over a time span of minutes and hours, and you do not have to wait months and years for a 15 percent return.
To achieve such a level of success, you have to understand three basic assumptions technical analysis makes about markets and price movements:
According to technical, an asset’s price contains all the information you need to know about to predict the asset’s future price movements. Profits and losses, positive and negative expectations, and all irrational market sentiments are included in the price, thereby presenting you with an aggregated version of the almost indefinite factors that influence an asset’s future price movements.
Technical analysis in binary options is the only way to extract this information. Understanding all factors that influence the asset over the next minutes is impossible, as some of these factors might be as random as someone selling stocks to buy a new car, one trader taking profits, and another trader investing his yearly bonus. Only technical analysis allows you to predict which direction the market will move in over the next half hour and how far it will move.
The market never moves in straight lines. Even the strongest movements show little zig zags where the market briefly reverses its direction before it picks up speed again and returns to its main direction. By allowing you to understand and predict these movements, technical analysis puts you into the position to take advantage of type of market environment.
Traders react to a situation in the same way that investors have reacted to the same situation before. This realization helps you to make sense of market movements on short timescales, where the up and down seems to be random.
All you need to do is recognize the patterns of market movements and know where they led in the past. With that knowledge, you can predict where the same movements will lead now. The two most popular techniques of technique analysis that implement this knowledge are candlestick patterns and trend analysis.
These two tools make the question why something is happening in the market obsolete. All you need to recognize is that the market has moved in similar ways before, and that these ways mostly have led to the same result. By anticipating this result, you can find numerous great opportunities to invest in a binary option.
It is tempting to try to avoid the time to learn technical analysis by simply investing on fundamental factors such as profits and earnings. While this might seem like a short cut, however, it really is a dead end.
Fundamental analysis can only predict market movements over years and decades – at best. Even when there are news that seem to dictate that an asset’s price will rise or fall, fundamental analysis can’t tell you how far the market will move and how long it will take to arrive there. Often, the market also reacts in the exact opposite way the news seem to indicate.
As a binary options trader, you can’t rely on all the classic assumptions about trading stocks. Never predict rising prices a stock because the company has great products and a growing loyal consumer base. These things do not affect the stock’s price on time frames that are relevant to binary options, and there is no guarantee that it will affect the stock over a long period of time.
Even the best stocks occasionally fall or oven go to a crisis, and even the worst stocks will have good days and months. One look at a stocks wavering price line should be enough to convince every trader that fundamental factors hardly effect any of these movements.