There are many things that will influence a price of an asset, so careful planning is needed before placing a trade. You can’t just leap straight in, well you can but you might as well just flip a coin heads is up, tails is down the results will be about the same.
The most widely used and basic binary option trade is the Put or Call trade and is the favourite amongst new traders when first joining in this trading environment. With this basic trade format it is possible for novice trader to place a trade and to potentially make some money at the same time as learning more about specific trading strategies. Even using this basic form of trading, novices will still need to understand what and how any one asset moves. This strategy simply require a trader to make an up or down prediction based on current market conditions, price trends often become clear during highly bullish or bearish times, enabling traders to earn money relatively quickly and easily, but even when price trends are strong it is fairly common to have a minor change in direction and then continue on in the original direction but a complete change of direction is not impossible especially if there has been news on that particular asset class. Asset prices will trend for a set but undefined periods, after which they will move back in the opposite direction, this is always the case, as support and resistance take control of price movement at some point and an asset can’t go in one direction for ever.
Even though it is possible to trade on just bullish or bearish sentiment it is far more effective when combined with fundamental and technical analysis as this combination will provide reassurance to the and potential support and resistant price areas of an asset. It is also vital to understand what has potential to move as asset class so an up to date economic calendar is essential.
Technical analysis can be fairly simple when implementing these binary options strategies. Charts and graphs can plainly show the general direction of an asset prices, whenever an asset price has trended either up or down for a while, a trader would need to calculate how long this trend may or may not last, this is where support and resistance calculations can assist in providing the answer.
In regards to fundamental analysis, marketplace news should make it easy for the trader to easily identify which type of marketplace conditions are taking place at any one time. Price shifts often occur when important news and economic data are published. When using a bullish or bearish binary options strategy it is essential to monitor marketplace news closely on a day to day basis as assets are more often or not more price volatile around a news announcement.