Trading binary option is quickly gaining popularity. This is facilitated by a number of its significant advantages over the classical stock trade. Firstly, market analysis takes less effort and time. Secondly, the level of profit with binary options is higher and the risk of loss is much smaller. Since the options are quite different from the traditional stock exchange, it will be interesting to compare both methods of analysis used by traders and find out which of them help the option traders best and guided them to succeed.
The principles of analysis
All the principles of analysis applied in the stock markets can be divided into fundamental and technical.
Fundamental analysis addresses global trends in politics and economy. It takes into account any events that may have an impact on the dynamics of prices and the availability of assets. To achieve a level of understanding that can guarantee consistently high profitability of transactions, one needs not only a long time of self-education and mastering the principles of market performance. You also need to thoroughly study the subject of your forecasts i.e. assets.
Technical analysis is a subject methodology: the trader directly assesses graphs reflecting the price change. Many believe that fluctuations in the graph quite sensitively reflect any changes, regardless their origin and there is no need to spend time and effort for studying any other information.
Binary options market actors as well as forex or stock exchange traders are very interested in the reliable and quick way to predict the dynamics of the price. Based on the needs and specificities of each type of trading, it can be assumed that the binary options do not require such a thorough study of trends. Since the object of the transaction is the direction of change without taking into account the amount and the price difference.
Skilled traders will carry out a comprehensive analysis to forecast the behaviour of prices in the future. All assumptions are based on graphs of asset prices. And only after such training, they will make a decision what option and for what time to purchase.