Type of traders
To trade binary options you have simple to choose an asset, a direction and experience time and place the trade. The important questions are: What asset? What directory? What experience time? The way to find the answer of these 3 questions is generally the same one and there are many ways to find out. This is split in 3 groups: Fundamental, Technical analytics and Price action. None of these 3 groups is better or worse than the other. It is mostly the personally choose of the trader and you cannot use all of them in any market conditions.
For example you cannot trade Fundamental if there is no news to any available asset. On the other hand you should not trade technical if there is news on the same assets. For a beginner it is strong recommended to select one of these, may test them in a demo account and stay focusing. It is better to trade one of the three good than all three bad. Additional there is a 4. group: Autotrader users.
Fundamental is trading news called too. This is a very accurate name. For example, a computer game company wants to develop a new game, the continuation of a very popular game. A binary option trader speculates now, that many forex traders buy stocks of this company since the new game would increment the goodwill of the company. More buyer than seller increment the stock value at the moment this news comes out. If the game get released based on the number of sales the price of the stock increment or decrement again. This is called a Bubble. For the trade it makes no matter if the price fall again, he makes his money based on the first news but can trade again if the number of sales get released, may in the other direction. Economy calendars showing global news. A good calendar for currencies is at the homepage investing.com:
Make sure the Time zone is set up correct. You see the time of news, the impact of the news shown as bull heads (more bull heads means stronger impact) and the Forecast, the result of last news and at past news the current result. Even if you do not trade fundamental keep every time an eye at the news. The rule of thumb is to do not trade an asset a half hour before and after news.
investing.com’s economic calendar
Technical indicators are mathematical formulas. There are much pre-created and widely used, for example the Bollinger Bands. Additional there are some user created indicators. For technical analytics the free chart solution MetaTrader is recommend. It come with many indicators on board. You can use a simple script language called MetaQuotes Language create your own indicators or include free indicators created by other traders. The biggest advantage of technical analytics is that strategies created by other traders can be used easy. You can use technical indicators in other trading ways too. The biggest example is the Moving Average which is used primary to determine trends. This can be very helpful in price action too.
Visible representation of bollinger bands (14, 2.2)
Read more: Technical indicators
Price action traders react direct at the price movement. For example if the price touches a strong support or resistance the trader places a binary option trade in the other direction. Another classical price action in binary option trading is called scalping. Even is the price is stable (non-violent) he change constantly as there are millions of traders worldwide. A scalping trader waits for a short peak of price movement in any direction and then place a trade in the other direction. You need for scalping lots of experience and it is not recommend for a beginner but it is a good example of price action trading with binary options. Price action does not mean that you never use any technical indicator. Especially the moving average can used to determine trends. For price action do market conditions exist, called Chart pattern.
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