Analysis is something which needs to be completed along with each and every binary options trade. Fundamental analysis is not overly complex, and in most cases, can be completed within ten minutes or less. Although financial data will need to be taken into consideration, this type of research does not involve the use of any highly technical charts or indicators. To put it simply, first-time traders should not experience any problem when using the following method of determining investor sentiment.
Before beginning, take a look at the asset index that is provided by your broker, or brokers. The analysis process will be much faster when you already know which assets are available to you. There is no need to memorize every underlying asset within the index, as some are quite extensive, but it can save time if you have a general idea of what the available options are. Make some notes if you wish, such as the hours during which the asset is available within the platform. Doing so is likely to prevent any wasted time.
The first step is extremely easy, and this will be to visit your preferred market news website. Some traders also tune into their favorite financial news television station and listen out for the top stories of the day. These are actions which you may already do, but if not, now is the time to start paying close attention to the events that are shaping the markets. The general goal is to look for any major stories that are impacting asset prices. These could be either positive or negative. It makes no difference, because when trading binary options, profits can be generated on any type of price action.
There will be times when no news is desirable, such as when using Boundary, No Touch, or Range instruments. These are the only trade types which are dependent on limited price movement in order to be profitable. When selecting these, the task of fundamental analysis will be connected to the determination that nothing is currently, or expected to send the price of your selected underlying asset into strong motion. For a fast determination, do an internet search for the specific asset and view the most current reports.
Some binary options brokers provide an economic calendar, while others do not. Either way, you’ll need to have access to one which provides a listing of the daily economic data reports, as well as stock-related earnings reports. This information will tell you much about what to expect from assets that are related to these reports, even going so far as to clue you in on what times changes may occur. Some traders do trade exclusively around the timed releases of these reports, while others simply use them as a reference point. Whatever your basic strategy, remember that they are important.
Fundamental analysis can certainly help with decision-making, but this type of research should be combined with technical analysis. Market conditions are forever changing, but this does not mean that they are never predictable. There will be times when price trends or range-bound movement point out easy profit opportunities that binary options traders can quickly take advantage of, generating a large profit in the process.