Well, tell me, what is the main task of a trader? It is correct to predict where asset prices will go. Then? Right. To do this, you need to know how to predict the market, because nothing will turn out that way.
Surely you’ve already guessed what we’re going to talk about today, right? Let’s talk about how you can analyze the market. What features each of them has. And where to start. So let’s start.
Types of predictions in binary options
First, let’s remember what methods traders use to perform market analysis. We can highlight two main categories:
- Fundamental analysis.
- Technical analysis.
In short, the first method is based on the study of several fundamental data. You don’t even need to know how to use a chart for this type of trading. The technical method of online binary options prediction is used more frequently. With its help, traders identify all moments to make a trade on the chart.
Each of these methods is different from each other. Therefore, it is better to talk about each separately.
Fundamental analysis
Financial markets are influenced by several factors:
- Political: Elections of the head of state, parliamentary elections, political decisions, etc.;
- Psychological: Rumors and expectations can also influence quotes. Therefore, professional fundamental traders not only check the facts, but also, the assumptions;
- Force majeure: These can be natural catastrophes or other unpredictable situations, which have an impact on the country’s economy and also on the national currency;
- Macroeconomic indicators: This is the strongest factor. Economic news is published regularly. Publications about the country’s GDP, the unemployment rate and dozens of other data that could affect a country’s economy.
Many novice traders want to learn how to predict binary options exchange rates using fundamental factors. At the same time, they often comment that it is possible to operate taking into account only macroeconomic news. This option can indeed be effective, but not completely.
For beginners, trading fundamental data may seem like a simple task. In theory, all you need to do is look at the economic calendar to make profitable deals. But, truthfully, that is not the case. Furthermore, this binary options prediction method is the most difficult to execute in practice. And all due to the fact that it is almost impossible to take into account all the news at once if there is no experience.
To become a successful trader without trading charts, it is highly desirable to have an economic education. In extreme cases, you can survive by studying professional literature. But with absolutely no experience, the probability of losing a deposit is much higher than increasing it.
How to predict exchange rates in binary options using a chart
One of the main critics of fundamental analysis said that all macroeconomic events are already included in the price. He also indicated that Price remembers everything. If the prices repeat the movement that has already happened before, the same thing will probably happen as last time. Did you find out whose words these are? They’re from legendary financial journalist, Charles Doe.
Technical analysis is divided into several categories:
- Velas (candlesticks);
- Graphic;
- Indicators.
Now let’s take a look at the features of each
How to predict exchange rates in binary options using candlesticks
Japanese candles can tell a trader a lot. They don’t just show price changes. Just by appearance they can indicate the moment of a likely price reversal.
Candles draw figures of varying complexity on the chart. Some patterns can be learned even by a beginner. And you will have to work hard to master the rest. For example, you can learn an engaging pattern or a pin bar in 2 minutes. But to correctly find and interpret the “Head and Shoulders” figure, you need to practice.
A candle can say a lot. Here are some examples to prove it.
Cut off the top and bottom. A candle without an upper or lower shadow. The bars are inverted, meaning a drop indicates a possible uptrend and an increase indicates a downtrend. However, additional confirmation must be requested.
Inverted hammer and shooting star. Candles with a long upper shadow and a short lower shadow. The body of the candles is also short. These bars are considered reversal bars. If a bullish candlestick has formed, a reversal or pullback to the upside is likely. Thus, when a descending bar appears, a drop in quotes should be expected.
Hammer. This candle can be ascending or descending. The latter is often called the “hanging woman”. Unlike the previous bars, this one has a short shadow at the top and a long one at the bottom. And yes, the hammer is also a reversal bar.
This is just a small part of what a trader needs to learn to understand how to predict binary options using candles.
Graphical method of online prediction in binary options
Fibonacci levels, support and resistance lines, triangles, flags, etc. They all have a lot to say to the trader. When the reversal begins or ends, when the trend reverses.
This method is a little more difficult to implement in practice than the previous one. After all, a trader needs to do more than just memorize different patterns. You need to learn how to build the figures correctly. But in this case, your accuracy will also be higher (note that this is a subjective opinion and you may disagree with it).
We described how to use the basic elements of graph analysis in previous articles. So now let’s not repeat it again. Now, let’s further discuss the latest version of binary options online technical forecast.
How to predict exchange rates in binary options using indicators
Technical indicators are especially popular among beginners, as they do all the analysis, rather than the trader. The latter only needs to identify the signal on the chart in time and make the operation.
However, you need to understand that each indicator gives only one signal, which can be true or false. Therefore, the signals need to be filtered. It will be even better if you can first do an independent analysis and then seek confirmation using indicators.
Hundreds of different instruments are available to traders today. Among them are several dozen classics, which have helped speculators in trading for decades. Most tools fall into 3 categories:
- Trend: This includes moving average, Bollinger bands, parabolic etc. These indicators show the direction of the trend and also indicate the points of a possible retracement, reversal or end of the trend. These instruments usually have a delay;
- Oscillators. Unlike trends, they are ahead of quotes, which is why they often give false signals. The most popular among oscillators are Stochastic, RSI, ADX and ATR indicator;
- Volume. Traders use it less frequently, but it should not be completely ignored. Unlike other indicators, these do not show their data based on price. Readings are based on the number of ticks and transactions per unit of time. Obviously, the standard trading terminals that are available to us do not provide exact data on volumes. However, they allow us to estimate the current demand for the asset.
Predicting binary options is a complicated thing. This is why the vast majority of traders break their accounts. Therefore, many people disagree that trading is for everyone.
If you want to make steady money, be prepared to study a large amount of content and information. Fast money in binary options is only possible by chance. We do not advise you to rely on luck. It’s up to you to decide.
