Market Analysis for Binary Options

If you have studied the forex market properly, you must have come across the three major ways to analyze the fx market namely:

Technical Analysis

Fundamental Analysis

Sentiment Analysis.

If you have known this basic analysis, you could also use it to trade binary options.
Just as simple as that!!!
We will also look at the difference between trading the Forex market and Binary Options in a nut shell. For now, can we move on with the technical….?

Technical Analysis

This is strictly the use of chart to analyze the market. The use of indicators like Moving Averages, Relative Strength Index, Bollinger Bands, and Stochastic are very important here.
Don't be afraid to use those indicators on your trading charts when planning to trade binary options.
Indicators help you gauge where price action may be headed next. These are used across all sorts of trading markets and not just the currency trading. Just make sure you have a good understanding of how each indicator works before applying it into your analysis. It could be even better to use combination of two or more indicators to make your analysis.
You can take a look at my killer setting below;

It’s simple and has a rule you must adhere to in order to trade successfully.
From the chart, there are 3 crosses to give you a signal for a CALL or PUT option.
The first is the MAs. The red must cross from under the blue for a call or above for a put.
Secondly, in stochastics, the red acts in the same manner like that of the MAs. There should be a cross from below or above to warrant a Call or Put entry.
Lastly the RSI must cross the green line above for a call or below for a put option.
We will learn more about the set-up when we’ve got to Trading Systems in this blog.
You must wait for the 3 crosses to take place to warrant an entry. That’s is to say, the three put together gives a reliable result than depending on only one or two of them.
Is that all?
Oh hell NO!! There is need to study technical levels and point of inflection to prove your decision making ability when you are trading binary options.
Have you ever heard of Double Top and Double Bottom, Head and Shoulder, Bullish and Bearish Peanants, Ascending and Descending Triangles, Rising and Falling wedge…….etc.

What about the Candlesticks pattern?
Do you know of the Dojis, the Hammer and Hanging Man, Three inside Up and three inside down, The tweezers….. etc.

One more, you should have some knowledge about Fibonacci, Support and Resistance levels.
You may ask; can I learn all these?

The only answer is YES. Because it will help you to make good trading decision
Let's take a look at this example on the chart below.

Price has just broken down from the head and shoulder. With this pattern, price normally continues to trade lower at a distance equivalent to the height of the head and shoulder

In this kind of pattern, you could take on the One-Touch trade.
Assuming this is GBP/USD and the broker offers you a strike price between 1.5450 -1.5550, which is within the height of the H & S, buying a "Put" option might be a setup worth considering.
Other patterns have different way of approach, and the type of trade you can apply to it when you come across such setups.

Let’s take a look at the Fundamental and Sentimental ways of analyzing your trades.