There are many strategies for Forex and binary option trading of currencies, oil, gold, silver. etc., but there are only a couple of methods that matter in making profitable trades.
The two primary foundations to good trading practices is fundamental and technical market analysis.
The simple objective of trading the Forex and binary options market is to earn profit by having a high percentage of winning trades. This objective can be better achieved by predicting the market via fundamental and technical analysis. For the purposes of this article, we will define these terms as follows:
Fundamental Market Analysis: Any macro-economic factor, that may include overall economy, the breaking news and releases of market reports, industry conditions, geo-political climate, natural disasters, etc.
Technical Market Analysis: Effectively utilizing various techniques to predict future price action by analyzing previous price patterns and historical market data.
When it comes to trading, timing is everything. Predicting the best time to enter may be the difference between winning and losing a trade.
Each time, before trading, the trader must be prepared by doing fundamental analysis of the market. This can be accomplished by reviewing various websites that feature a market events calendar for the currencies a trader is looking to trade. A currency or commodity news event may have varying degrees of impact depending on the information being released. Some fundamental news releases will have significant impact in terms of market movement while others will be relatively minor.
If a trader gets in on a trade and does not realize that a market report is being released at the time of entry to a currency pairing, then they may have jeopardized the success of the trade. This scenario can be curbed by doing due diligence on knowing the fundamental news impact of the overall market and the particular currency pairs that are planned on being traded for that session.
Once the trader has implemented fundamental market analysis, then they are able to move forward with technical market analysis. Technical analysis may include the identifying of trends and patterns that are
affecting market movement. The ability to predict these patterns accurately is what leads the trader to success and profit.
A common approach to technical analysis is by utilizing a trading system. A reliable system takes market considerations into account through a powerful assessment and measurement of indices and algorithms that analyze the impact of market movement in one direction or the other. As the market moves, the system may have the ability to analyze numerous aspects of the trend and provide signals or alerts on when the best opportunity to enter a trade presents itself.
A reliable technical trading system may prove to be invaluable to trading success and profit.
In summary, the trader must take into account fundamental and technical market analysis in order to achieve success. This can be best optimized by a combination of the trader's due diligence in tandem with having a reliable system that has the ability to signal the trader on the best opportunity to enter and earn profit.
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