Analyzing and trading in Binary Options

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Analyzing Binary Options

It is readily apparent even to new investors how thousands of factors are involved in the direction that assets move. But successful traders are able to analyze the information and make educated predictions before they choose their options. Binary options requires a sound financial mind to make your investment grow. A new trader cannot just sign up in a binary options broker of his choice and start trading without the fundamental knowledge of the market. He can, but it is not a wise move since binary options without informed decisions results to a nature of gambling.

Analysis is therefore important before purchasing any binary options. When analysis is done, the trader is more equipped to make the right call or put options, if the market trend for a specific time is carefully analyzed. There are two main ways to analyze the market, through fundamental analysis and through technical analysis. Both methods may be used independently or in conjunction with the other.

Elementary Analysis for Binary Options

Whenever a trader trades binary options, or trades any market options for that matter, he or she needs to know with the trends in the market in order to make informed decisions. From this information, the trader know whether the price of an asset goes up, or down, and he can trade accordingly. This is the safest way to trade binary options, and most experienced traders have been successful because they are informed.

Elementary analysis is the fundamental method of prediction that looks into facts that are available to a trader to come up with an idea on how the market will move. These facts about market movement may come from world and economic news, public statements from companies, local news reports, current events on the local and world market, and virtually everything else that might impact the value of an asset. The elementary analyst then examines the collected data to try to predict new trends in the market.

Elementary Analysis Example

Let’s take for example a trader who is looking at currency pairs. He might watch for a public report from a country on their GDP, or an announcement from their central bank. An equity trader might look at what a company’s quarterly reports show about their performance, or listen to announcements from a CEO to gain some insight into the direction a stock might take. It is important for an elementary analyst to keep both a broad view and a specific view, noting what is happening in the world at large, as well as what is happening on the micro scale with regards to specific assets.

Elementary analysis is highly subjective. This means that unlike other objective analysis techniques, different traders may have different interpretations of what a CEO’s announcement means about the health of the company, or how a natural calamity will affect the price of oil
Because there are no rules set in stone, elementary traders are generally referred to as discretionary traders, using their own judgment to decide the course of action to take after analyzing all the data they have acquired.

Advanced Technical Analysis for Binary Options

Advanced technical analysis for binary options is the process of analyzing statistics and numerical data about specific options in order to create more accurate predictions on which direction an underlying asset will move. Many different methodologies are used in technical analysis. These methods can both objective and subjective, and each trader has his own interpretation regarding each method. The methods for advanced technical analysis include trend following, means reversion, momentum tracking, and pattern recognition.

Principles of Advanced Technical Analysis

Advanced technical analysis is the quantitative study of prices and volumes in order to predict the price of an underlying asset such as stocks, currency pairs, indices or commodities. Advanced technical analysis can help traders determine what is likely to happen in the future so that they can make accurate predictions regarding market moves and receive high returns on their investments.

New traders are also advised to master the following methodologies to maximize their returns and have a good trading experience.

Trend Following

Trend following is a form of advanced technical analysis that looks in historical data of an underlying asset to see if a trend is occurring. A trend is basically defined as any sustained movement in one direction. By looking at the historical moving average of an asset, a trader can determine whether or not a trend is developing. Then, he can make a prediction according to the trend, lowering his risk on his investment.

A Trend Following Example

A trader is interested in purchasing gold and wants to see if there is an established trend. The trader looks at the 2-day moving average for gold, as well as the 5-day moving average for the asset. If the 2-day moving average has crossed significantly either above or below the 5-day moving average, the he can safely assume that a trend has developed, in either an upwards or downwards direction. He now purchases a call or a put option based on the trend.

Means Reversion

Binary options assets may rise or fall. If a trader is able to compute the mean or the average price of an asset, he can use this to his advantage to predict general range of the price where an asset expires. This method can be used for High/Low, Touch/No Touch, and In/Out options. It is up to the trader to use the mean price information of an asset correctly to accurately predict the next movement.

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The concept behind means reversion is that assets tend to settle back towards their mean. If a trader can determine the mean of an asset, it will make it much easier to predict the direction accurately and get the high return on the investment.

Momentum Tracking

Momentum tracking is a common method used in advanced technical analysis. From the term, this method employs tools that track the momentum, or how an asset price changes with time, to create an accurate prediction on where the price will strike next. When a price is moving up quickly, a trader can make a specific call or put option based on the price movement and expiry time.

A tool used for momentum tracking is called the Moving Average Convergence Divergence (MACD). By using MACD, a trader can determine whether the momentum of an asset is rising or falling, and place their trade accordingly. Calculating momentum is quite a complex process, but once an MACD indicator is determined, it can be used to track the changes of and averages. If the averages are generally larger than the averages, momentum can be said to be increasing, while if averages are smaller, momentum is be said to be decreasing.

Pattern Recognition

Patterns in the movement of a price can be made with various tools available to the trader. When technical traders look for patterns in the movement of an asset or sector of the market, they can make an accurate prediction as to where a price will land after a specific time frame. Using the advanced technical analysis can be somewhat complex, and may cause a trader to invest unsuccessfully. But if properly used, pattern recognition can lead to profitability.

Fundamental Analysis in Binary Options

As we have established time and again, binary options trading requires different kinds of analyses that pertain to market sentiment and price movement. These analyses are based from the ones used in traditional trading. Since binary options is a direct derivative of the market, these analyses techniques can easily be applied when trading binary options. The binary options trader should therefore look into these indicators if he wants to continue making successful trades.

We have mentioned before that there are two kinds of analysis. The first being the elementary fundamental analysis, and the second being a more advanced technical analysis. Technical analysis refers to reading quantitative data to look out for trends and indicators that tell the binary options trader when is the right time to trade and what binary option to purchase. Technical analysis makes use of the different tools that binary options brokers provide in order to provide the trader with the right information.

Fundamental analysis, on the other hand, is what binary options traders use to analyze market news and sentiment to predict the future value of an asset. Fundamental analyses of the market so “fundamental” in nature as far as using the news to trade the markets is concerned because unlike the quantitative nature of technical analysis, this type is a qualitative measure to analyze world market trends. Different sources and tools are used for fundamental analysis, and every binary options broker should know how to employ the data that they gathered to yield meaningful information for their trades.

Global Landscape

The binary options trader needs to look into a global landscape. Countries that are regarded as major players in world economics and politics are to be considered. The economies of other countries are dependents on the performance of these countries. For example, in an effort to rebuild the global monetary system after WW2, the US came up with the system. This is a system of monetary management that established the rules for commercial and financial relations among the world’s major industrial states established in the late 1940’s. This is the first example of a fully negotiated monetary order intended to govern monetary relations among independent .

Since then, the US dollar has been the standard currency on which international trade is based. In the 2000’s, China has also started to become a big key player in the market. It has also assumed a similar role and its vast industrialization has placed a huge demand on certain assets such as oil. Countries in Africa have been dependent on China for a number of resources. In Europe, Germany has the strongest economy. This country has been dominant as far as bailing out troubled countries affected by the establishment of the Euro.

How does knowing the global landscape help in trading? Quite simply, periodic announcements from key players, countries and companies, in the market affect price change in the market. When they give out a statement concerning key economic and political events that have an impact on world economics, the binary options trader should always be an earshot away. The markets monitor these announcements very closely because they will impact the future of the world economy at any given point in time.

Depending on the outcome of a key announcement by a country or company, the market may react differently. It may either assume a positive sentiment or a negative sentiment on the economy and currency of the country making the announcement. This in turn will have a domino effect on the sentiment and outlook of traders in other countries whose economies are dependent to the performance of these major players. Once market trend has been formed based on a specific sentiment, binary options traders are now able to trade assets based on the trend and could either buy more of the asset or sell it off and move to safer investments.

This is the reason why the news has such a profound impact in the market. Human emotions play an intricate role in the movement of the market, and it is in the news where we find updates on these emotions.

News announcements can be classified based on the extent of their global impact on the world economy and asset sentiments. News can be , , or .

More often, binary options traders pay more attention to news. This is because announcements create a greater effect on the world market than news. But, it is possible for a news item to transition to news, depending on the prevailing economic factors. For example, the housing data and the GDP figures of Eurozone economies like Spain, Portugal, Ireland, Greece and Italy are factors. They hardly made impact on the markets a few years ago. But now, these data are now major market movers because the economic dynamics have changed and made these data very important in the assessment of the economic health of US and Europe.

Here are some things to look for in a country or company when doing fundamental analysis.

  • Gross Domestic Product (GDP)
  • Employment Data
  • Manufacturing Data
  • Reports
  • Consumer sentiment
  • Retail sales reports

Analyzing Deviation

Fundamental analysis studies some component factors to help the binary options trader get a feel of market sentiment based on global news items. These factors are the following.

  1. Consensus or the Expected Number — This number is based on a poll of leading economists who will give an average figure which they expect the news to conform to.
  2. Actual Number — This is the actual figure mentioned in the news release.
  3. Deviation — This is the difference between the consensus figure and the actual figure.

Traders look into these figures when using the news to trade the markets. The binary options trader may specifically look into the deviation to look for market surprises. In this situation, the deviation is much higher than the expected figure, either to the upside or downside. For traders, this gives a very good and reliable, tradable signal.

There are ways to measure the deviation to see if a deviation is tradable or not. Generally speaking, the deviation benchmark is obtained by comparing the expected figure and the previous number. The difference now serves as the benchmark to the upside and downside, and depending on how far above or below the deviation is from the benchmark, the market will react accordingly.

Using the news to trade the binary options market will depend on how the trader uses the information. No matter how the trader uses the news, global markets will still be affected by how humans in control of countries and companies move. This sentiment is what produces the greatest trading opportunities.

So, if you are a binary options trader, it would be wise to start watching financial news and subscribe to financial news websites. Meanwhile, we will. continue to provide you with help as you start profiting from binary options trading.

Using IQ Option platform for binary trading in Hong Kong: comfort and reliability

Binary options are understood as an interesting and promising financial instrument but on the other hand such instrument is rather controversial.

Somebody compares it to a roulette. Others frequently call options gambling. To understand the instrument, it should be analyzed deeply.

The history of binary options: a brief overview

In fact, binary options are considered as the most recent investing instrument that appeared in the USA in 2008.

Chicago Board Options Exchange opened two binary options: for S&P500 and for VIX indexes. Since then, the new instrument has started to spread all over the world.

Referring to the European financial system the crucial decision was made in 2020.

At present time, different governments show different attitude towards binary options but the instrument is available for trading in the majority of countries including Hong Kong.

What do binary options mean?

Apart from other assets like shares, traditional or digital currencies binary options give you no property rights.

Those assets are contracts between a trader and a broker and each party takes certain duties.

A trader loses its investment in case of differences between a prediction made and a real market situation. The principle ‘all or nothing’ is realized. A broker is obliged to pay fixed amount of money when a prediction was right. Expiration time, asset and investment are the key contract clauses.

A deal between a trader and a broker can be illustrated by the following example. A user visited a particular broker platform and had picked up EUR/USD asset. When expiration time is from 1 to 5 minutes, a trader gets 95% profit. A user selected 3 minutes and had invested 10 USD. At that moment EUR/USD index was 1.08420. Analyzing news and trends a user predicted that in the upcoming minutes the index would increase and had made a deal. The index increased to 1.08421 and that had brought $9.5 net profit to a user.

Thus, no matter how much the index increases, the profit is fixed and depends on the result only. In the index was 1.08419 a trader would have lost his investment.

Looking for a broker: why a platform may influence your success?

Referring to binary options trading, a broker frequently plays the crucial role, either positive or negative.

The following aspects prove the importance of a reliable broker selection:

  1. License. Unlicensed brokers have no responsibility before their users whose rights can be violated.
  2. Technological background. The less innovative and convenient a platform is the less successful your trading is expected to be.
  3. Financial background. Traders expect getting convenient process of depositing and withdrawing their funds. Any problems lead to time-wasting and nervousness.

IQ Option binary options trading: liberty, equality and brotherhood

IQ Option broker is considered among the most reliable ones being awarded for its customer-friendliness and progressive technologies.

The main advantages of the broker can be summarized in the following statements:

  1. Platforms were developed implementing the recent technologies therefore operations are several times quicker than competitors have.
  2. Diverse array of assets is suggested for trading (referring to binary options, there offered more than 50 assets including OTC options).
  3. Complete customer support is provided (24/7 support, thematic chats, native language chats, etc.). All problems are expected to be solved in minutes.
  4. Apps for PC and mobile phones are developed together with online version to offer traders trading variability.
  5. The highest level of trader-friendliness is guaranteed. Working out a platform, developers had been taking into account traders’ opinions.
  6. The trading process can be completely personalized using different analysis instruments and even color schemes. Settings will be saved for your next sessions.
  7. Multiple ways of depositing and withdrawing funds are suggested for users.

Getting an account on IQ Option is a totally simple task.

Visit a website, press ‘Sign Up’, insert all necessary information and confirm terms and conditions. The whole process takes some 5 minutes.

How to make a deal on binary options Hong Kong?

If you wish to invest funds in binary options IQ Option platform offers the best conditions for users.

Just follow some simple steps:

  1. Log in your account.
  2. Open a new asset by pressing ‘+’ in the upper left corner. You will be offered diverse array of assets for investing.
  3. Click in the preferable currency pair or share to start trading. A chart with price changes will be displayed for selected asset. Price changes are shown online, directly from the market.
  4. You are able to change a chart time from 30 days to 2 minutes in order to get necessary information for the current market situation analyzing and further predictions.
  5. Pick up expiration time taking into account that fixed profits are the highest for a period from 1 to 5 minutes while a trader is suggested selecting expiration time up to 2 hours.
  6. Insert the amount of your investment. Our platform offers making deals starting with $1. The maximal amount of your investment is limited by 20 000 USD.
  7. Press ‘Higher’ or ‘Lower’ depending on your analysis. 30 seconds before the expiration time a trader is able to make deals. What’s more those deals can be to both results – i.e. both ‘Higher’ and ‘Lower’. There exist no limitations for the number of deals.

When the expiration time comes and your prediction corresponds to the market situation, funds are charged to your account in several seconds.

Binary trading FAQ

Which instruments are used for analyzing price movement?

Binary options belong to the category of financial assets therefore their analysis is connected with special instruments applying. Those are divided into three categories. Economic calendar includes all news that concern chosen assets. Every news may affect the price significantly. Indicators like Bollinger lines, Stochastic, MACD are necessary to analyze the trends and understand further price movement.

H3: Which binary options IQ strategy should I select?

There exist tens of different strategies for binary trading. Among the most widespread strategies the following ones can be pointed out: Ishimoku Cloud, Profitable hedge, Slaughter, Ninja, Puria, Trend Channel, etc. Strategies are worked out for particular expiration time. There exist turbo ones for 1-5 minutes or ordinary oriented on longer time.
In fact, every strategy should be tested on different assets and personal experience only may tell which strategies are the best ones.

How should I test those strategies?

Our platform offers perfect conditions for strategies testing. Every user obtains a demo account after registration. The main advantage of a demo account lies in getting virtual money. An account contains $10 000. When those funds are spent, an account can be refilled again. Refilling is unlimited. No real money is necessary for an account refilling.
Thus, traders are free to pick up different assets and test different strategies in order to find the most effective ones.

Should I select shares or currency pairs for trading?

In fact, those assets cannot be compared because they imply different trading principles, different strategies and different profits as well. Shares are understood as more professional instrument. Their price mostly depends on fundamental factors including news therefore traders are recommended selecting maximal expiration time periods. Referring to currencies, the influential factors are more numerous and the situation changes every second.

Which currency pairs are the most suitable for beginners?

Our platform offers more than 40 different currency pairs for trading but users cannot pick up all assets because each type demands profound analysis therefore professionals recommend selecting one or two assets and use them for trading. The more you understand the situation, the more profits you obtain. Picking up currency pairs pay attention to the following criteria:
· Volatility. There exist pairs with minimal volatility (EUR/GBP, NZD/USD, etc.), medium volatility (EUR/USD, CAD/JPY, etc.) and high volatility (EUR/NZD, GBP/AUD, etc.). Traders are recommended to trade pairs with medium volatility.
· Popularity. The more popular assets are among traders the more complicated their prices movements are predicted. For instance, GBP/USD and EUR/JPY are not recommended for newcomers.
· Motive force. Different currency pairs depend on some assets or other factors and such peculiarity must be taken into account by traders. For instance, pairs with GBP are highly dependent on the news from the UK. USD/CAD pair depends on oil prices. AUD/USD and NZD/USD depend on precious metals’ prices and on weather as well.
Thus, traders are expected to take all those factors into account and then pick up a currency pair understood as the most preferable one.

Can I open deals for different assets?

Using ‘Open new asset’ traders are able to make unlimited number of deals for any assets they wish. The total portfolio contains information about all you deals. Such option is recommended being used for correlated currency pairs. For instance, EUR/USD and USD/CHF move almost identically. The same concerns AUD/USD and NZD/USD pairs.

How can I improve my trading skills?

Binary options are understood as an instrument that demands the highest level of professionalism. Our platform offers extended functionality for those who downloaded apps for their PCs, laptops or smartphones. Video tutorials are suggested for free. Moreover, you may participate in IQ option tournaments that welcome traders from all over the world and imply attractive prize pools. Some tournaments are offered for free while others demand fee that is just several dollars.

H3: Are there any information for binary option assets?

Our platform offers some information for users including the recent news concerning a trading pair, technical analysis, predictions, etc. Based on those data analyzing the price movements becomes much simpler. Using apps, traders may follow to 9 charts simultaneously where different periods of time can be selected.

Is binary trading available on weekends?

Most assets are closed on weekends because financial organizations work from Monday till Friday all over the world but some assets are still available for trading. Those are Over-The-Counter pairs suggested by a broker. Price movement is controlled by a broker as well therefore assets are understood as the most risky. On the other hand, profits are maximal for OTC pairs. When other markets are closed, the opening time is indicated. For instance, AUD/JPY asset opens in 2 days 4 hours.

Hong Kong is rather loyal country to all innovations and investment instruments as well. Citizens are free to invest in binary options but a platform should be obligatory licensed. Speaking about the trading norms, users are just obliged to pay taxes from their profits.

Should I pay taxes from trading profits in Hong Kong?

Definitely yes! Profits obtained from binary trading are classified as general profits therefore a trader is obliged to pay income taxes. The rates differ from one to another canton. For instance, in Zug taxes are just 23% while in Neuchatel 37% are charged from traders. Zug is the most favorable place for different investing activities and the canton is even called the Crypto Valley.

Can I earn for living trading binary options?

The main paradox lies in the fact that traders should not think about money. Thinking about money is connected with emotions while emotions are understood as the main enemy of a trader. The circle is closed. Thinking about results, skills and professionalism is a road toward success.

Best Binary Options Brokers 2020:
  • Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners!
    Big Sign-Up Bonus!
    Free Trading Education!
    Free Demo Account!

  • Binomo

    Only For Experienced Traders!

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