Analyzing and traders in binary options forum
The first step in performing a binary options analysis for this trade was to locate a chart for the EURUSD to analyse. Since most binary options brokers do not offer charting tools, we had to locate a forex broker whose trading platform had charts or us to use. We located one and started the analysis. In the financial markets, the fundamentals of an asset always supersede the technicals.
This is why we did a fundamental analysis first. At the time of analysis, there was a meeting of the Eurozone financial ministers to determine how to put together a rescue package for Greece, which was groaning under a sovereign debt crisis. At the same time, Italy was also on the radar as its debt reached a staggering billion Euros.
These were indeed bad times for the Euro and the markets had responded accordingly. We knew that the markets would be range-bound as traders looked to the outcome of that meeting for direction. Thus, we did not see the Euro climbing past the 1. The binary options market is no different. Without binary options analysis, trade would be more of guesswork and nothing would distinguish it from the roulettes and other stuff that belong to the casinos of Las Vegas.
In binary options, there is no place for gambling or guesswork in trades; leave that to the guys in Vegas. Sometimes, binary options trades are referred to as bets.
I really do not like this terminology, because trading is not something you pick up from the street. If one has decided to trade binary options, it has to be taken seriously and learning to perform binary options analysis is an integral part of the learning process.
Since the same assets that are traded in their respective markets are the same ones we will encounter in binary options, it is necessary to know how to analyse these assets technically and fundamentally. When the trader has mastered this, he will be able to carry out solid binary options analysis. Let us take an actual trade example. Now was this a product of guesswork or a trading hunch? The same is true if prices are moving down from resistance in a long term downtrend.
Look at the chart below. This is a signal for a short term trader to begin looking for signals on a shorter term chart. This signal to look for signals is good until the asset prices meets resistance. Looking below you can see that a savvy day trader could have made several, if not dozens, of entries in that time using a shorter time frame chart.
This is a chart of 30 minute closing, you can use one hour, 4 hour or 15 minute if you like, the point is to harness the power of longer term trends with a shorter term time frame.
In my example I simply use a 30 bar EMA for entries and came up with nearly two dozen before I stopped counting. Any and all types of analysis can be used on the market in this time frame to gain signals once you establish the parameters of the trade.
What the general direction is, where price is moving from and where it is moving to. In this next chart I take the analysis a step further with the addition of near term trend lines, support and resistance.