Fundamental and technical analysis for binary options. Technical analysis for binary options Study of technical analysis forex and binary options

People are silent about the difficulties, but they talk about the possibilities. The advantages of binary options are speed, accessibility, simplicity and low risks when making money. In their opinion, it is "not difficult, the main thing is to decide on the direction, and then trade." Let's assume it is. However, such a statement suggests the thought of Felix Baumgartner - the guy who jumped from the stratosphere and said: "yes, it's easy, just get off the platform and that's it, it's done."

You can probably guess what the conversation is about. Determination of the desired direction in binary options as difficult a task as overcoming sound barrier in free fall. Even despite the fact that someone says otherwise.

Of course, I cannot fully judge extreme sports, but I can tell you in detail about application of technical analysis in.

Graphic schemes for technical research

Fundamentals of technical analysis primarily include graphs that, through graphical construction, demonstrate temporary changes asset value. Such schemes can be displayed in any form: a financial bar, Japanese candlesticks, a line chart. The last option is offered practically by those involved in binary options.

From the very beginning of trading, people can notice the regular movement of the asset. Thanks to technical analysis in options traders draw conclusions and make forecasts regarding the future direction of the asset. In other words, the “Double Top” pattern indicates a decline: the price is behaving as before, a downward movement is predicted.

There is an opposite pattern, it is called the "Double Bottom". In contrast to the "Double Top", this figure contributes to the increase of the asset, i.e. leads to upward movement.

In addition to the listed patterns, there are many others (you can read about them in the article "").

It is important to know that these patterns do not predict the future direction of the market with 100% certainty. They just give a guide to everything. For example, if the indicators are leaning towards a particular direction, and the chart confirms this choice, then most likely it will be so. However, there is always a risk, since nothing related to trading can be 100% guaranteed. Trading is always unpredictable. And if someone claims the opposite, then he is either mistaken or lying.

trend

Application of technical analysis in binary options trading contributes to determining the direction of the asset: . Prices are in an uptrend if each High and Low is greater than the previous one. The same applies to a downtrend, only in reverse order - if each High and Low is underestimated compared to the previous one. But there can be exceptions to any rule.

It is worth remembering that when a trend is identified, it is foolish to immediately enter. To begin with, it is worth finding kickbacks, weaknesses and strengths, indicators of attrition, etc. Trends should be approached with responsibility and care. In this case, the following articles may be useful: "With a trend on a short leg", "A simple trend line", "A strategic approach to trend lines".

S/R levels - support and resistance - Supply / Resistance

The most significant part technical analysis in options are: index, indicator of convergence and divergence of moving averages, stochastic indicator, etc. You can get acquainted with all technical indicators in detail in the articles posted on our website.

It is worth emphasizing that each indicator comes from a price and displays price activity in a slightly different way than Japanese candlesticks or financial bars.

Under no circumstances should indicators be solely relied upon as they interact with price and price is unstable. Technical indicators can be used in a variety of ways, and will be covered in the Trading School in the following lessons.

Conclusion

As you can see, technical analysis includes many important elements. It is a big mistake to act on the basis of only one, because in this case the chances of success are greatly reduced. Competent traders use all the tools necessary to find the best opportunities and good price directions.

This article is an introductory part to the topic under study. In order to fully own the necessary information, you should study a lot of articles on technical analysis.

Now you can at least understand that the brokers who talk about the ease of this business are not telling the truth.

Start trading Binary Options with trusted brokers listed below

Binary options analytics helps traders not only make correct predictions, but also develop new profitable strategies. Technical and fundamental analysis should be carried out in a complex, and on their basis, both short-term and long-term conclusions can be drawn about the behavior of the asset price. Technical analysis for binary options, it is more difficult to implement, since here it is necessary to deal with a set of tools and indicators, which we will consider below. Fundamental analysis is the monitoring of world economic and economic news. These two types of analysis are closely related and directly influence each other. For example, the reflection of any financial news can always be clearly seen on the charts.

Technical analysis of binary options

You can learn how to conduct technical analysis using an online chart. The bottom line is to analyze the statistics of a particular asset in order to predict its future value. To do this, you need to understand the types of technical indicators and analyzers. You need to know what trend lines, pivot points are and study the patterns on which most of the most famous strategies are built.

Consider the main indicators that any trader will have to deal with.

• Trend Finder. This is nothing more than a moving average, which shows us the general direction of the trend - up, down or flat.

• Oscillator. Represents the curve below the price chart. This curve gives us information about the overbought and oversold of an asset and is measured as a percentage. If the oscillator tends to go up and reaches the 100% mark, this is a sign of an imminent trend reversal in reverse side and, accordingly, a signal to buy a PUT option.

• Channels. It is necessary to draw a channel on the chart in the following way: the upper line should limit the price movement up, and the lower line - down. Channels give a good idea of ​​the direction of the trend. You can use them to trade Call/Put options, touch options and 60 seconds options.

• Wedges. Option analysis for trading "Call/Put" options is carried out using wedges, which are ascending and descending. These are important figures that are built on the principle of channels, but the upper and lower lines go at an angle to each other so that they can soon intersect. For some time, the price chart will move within the outlined limits, but a breakdown of the upper or lower boundaries is inevitable.

• Triangle . The figure can be called a subspecies of the wedge. An ascending triangle is formed by a horizontal trend line and a lower line pointing upwards. Rising, because the lows of the asset value are rising. In this case, a bullish breakdown is expected. A descending triangle, on the other hand, has a horizontal lower trend line and a downward trending upper line. Breakdown, respectively, is expected to be bearish. In a symmetrical triangle, the top and bottom lines are slanted.

• Bollinger Bands. This is an auxiliary indicator, which consists of 3 bands and helps to determine changes in the upper or lower price limit when it fluctuates in a certain range. Bollinger Bands in conjunction with oscillators can be used to trade Call/Put options.

• Candles . The most accurate technical analysis of binary options can be obtained using the candlestick chart type. Candlesticks are good at showing the smallest price changes, which can be very important. They can also signal a reversal in the value of an asset in the opposite direction.

Binary Options: Economic News Analysis

Fundamental analysis is based on external and internal economic factors of both an individual country and the world as a whole. If you get into the habit of steadily paying attention to world news, you can predict where the price of any currency pair will be in a couple of hours after the news release. Any option analyst and trader knows that it is impossible to trade at the time of the release of news reports, as well as 2 hours before and after this moment. It is not always clear how the market will react to changes. If the technical analysis showed that the price should rise in the next couple of hours, then after the release of financial news, the market may change its direction dramatically. Therefore, for a certain period of time it is necessary to be in the stage of waiting and analyzing the latest economic reports.

What are the main aspects of world news worth paying attention to?

• GDP of the country (which country, depends on the selected asset)
• Conditions of the economy (general and local)
• Exchange rate of the Central Bank
• Reports large companies(corporations) that are listed on stock exchanges
• Statements by leading political figures and heads of state
• Macroeconomics
• Predictions of the state of the world ecology

Analyzing binary options trading can take up most of your time, especially if you are a beginner trader. You still need to know the basic principles of technical and fundamental analysis, since trading without a strategy and ignorance of the market is a guaranteed loss. If there is not enough time for everything, you can always subscribe to signals from Mark Ivanov, an experienced trader and analyst. So you can easier and faster, while simultaneously conducting technical analysis under the guidance of a specialist. To become a member of Mark Ivanov's trading club, go through a quick registration.

Technical analysis makes it possible to work without the help of indicators, using it traders proceed from the assumption that the price takes into account absolutely everything. Due to the fact that the history is cyclical, and the chart behaves in the same way under the same conditions, it is possible to predict its behavior based on historical data. Practice proves that it works, and not only in Forex.

Technical analysis tool

Technical analysis for binary options is good because it allows you to use the simplest elements. For trading, we recommend using:

• trend lines;
• horizontal support/resistance levels;
• Fibonacci levels;
• graphic patterns;
• it is desirable to include candlestick patterns, at least typical reversal formations.

Using technical analysis, you need to abandon short expiration periods. We have already done a separate one and came to the conclusion that from the point of view of the balance between risk and profitability, the best option is the expiration time of at least one hour, if not more.

Basics of using technical analysis

Let's take a closer look at each of these points. Screenshots are from the MT4 trading terminal, this is due to the fact that the terminals on the brokers' websites do not allow you to work normally with the chart.

trend lines

They are built through 2 price extremes, the support line through 2 local lows, the resistance line through 2 highs. If the price touches it and bounces, you can try to bet on the growth based on the rebound. Consider the following:

• the 3rd approach of the chart to support / resistance is considered the most significant, it is on it that the rebound most often occurs;
• the more times the price bounces off the trend line, the more “weight” it has.

But with each new approach, the probability of a breakdown increases. So if the price approached support/resistance by 5-6 times, then it is risky to count on a rebound.

For beginners, acquaintance with technical analysis for binary options is better to start with this tool.

You can work on the breakdown of trend lines, but the risk increases. Forex is usually waiting for a retest, in the case of binary options, you can do the same.

Horizontal levels

They are horizontal levels that are built through significant price highs/lows. To build, you just need to zoom out and draw horizontal lines by eye through those extrema that stand out from the rest.

The working methods are the same:

• place a bet when the price is rebounded;
• on his trial and retest.

Levels can be built not only at extreme prices, but also at pricesclose. Adjust their position so that the price touches it as many times as possible.

Clusters of levels at a short distance have an increased significance. The price rarely breaks through such zones the first time, at least it slows down in them.

In technical analysis, horizontal lines are more likely to be used to determine the range that the chart may have problems overcoming.

Fibo levels

They are used after the start of a trend correction. We will be interested in 38.2%, 50.0% and 61.8%, the ideal development of events is a smooth correction to the level of 38.2% and then the resumption of movement in the previous direction.

Forex also uses Fibo extensions to predict the level where take profit should be placed, but in the case of options, this does not play a special role. It is important for us that the price goes in the right direction, but the amount of movement in points does not matter.

By itself, the fact that the price touches the Fibo level cannot be considered sufficient grounds for a growth bet. They should be used in combination with candle and chart patterns, trend lines and support/resistance levels.

A combination of Stochastic and Fibo levels shows itself well during a correction. For example, during an uptrend, simultaneously with the price touching the 38.2% level and rebounding from it, the oscillator lines exit the oversold zone, this can be considered a good signal for a growth bet.

Remember, the use of technical analysis for binary options does not require the abandonment of indicators, they can be used as an additional filter.

Candlestick and chart patterns

In future publications, we will dwell on these materials in more detail. In the meantime, let's give a general description.

Chart patterns are understood as certain figures, the effectiveness of which has been tested on history. The price most often behaves in the same way under the same conditions, so the figures work out well. We recommend using chart patterns such as:

• triangles;
• pennants;
• wedges;

• rectangles;
• double tops/bottoms;
• head and shoulders.

As for candlestick analysis, it is recommended to combine it with technical analysis for binary options. You can limit yourself to the simplest reversal patterns: shooting and rising star, bullish/bearish absorption, gap in the clouds/veil of dark clouds, doji.

All of the above tools are desirable combine with each other so that the entry signal is repeatedly confirmed. In the example, the signal has 3 confirmations at once, it can be taken into work.

Conclusion

Technical analysis allows you to work without the use of indicators, although no one forces you to completely abandon them. Practice proves that by studying the behavior of the price chart in the past, a trader gets the opportunity to predict his behavior in the future, this technique can be used not only in Forex, but also in binary options.

The only caveat is the selection of the expiration date, there is no universal recipe for this issue. But in any case, if you take into work only ideal signals, you will be able to work profitably.

Good time of the day everyone! The title of the topic of the article may raise suspicions that it will be about something boring and obscure ... However, this is not at all the case.

I always try to communicate with you, friends, in human language, although from time to time I have to resort to special terminology. And that's okay. There is nothing complicated and, moreover, boring here: you just need to overcome laziness and try to figure it out ...

Moreover, today I will tell everyone who wants to EARN ON BO, important and necessary things!

If you learn how to analyze options correctly, evaluate current features market, all key features, you can make your work more stable. All actions that will be taken on the basis of competent analysis will certainly be successful.

Even if it is not possible to achieve one hundred percent indicators, then the level of won deals will definitely increase.

What I'm talking about today:

What is option analysis?

This process is very important for any trader who wants to achieve significant results in options trading. It lies in the ability to compare relevant factors, consider all the nuances of the market and everything else.

There are a large number of analytical methods that make it possible to predict market movements, asset selection and other nuances.

Features of the choice of the analytical method

If you are new to BO trading, trust me, my advice will be more than useful to you!

First of all, every newcomer to this market must choose a qualitative method that will allow you to adequately predict the state of the market and all other details.

Novice traders usually have limited knowledge in terms of analysis, tools for its implementation.

Therefore, it is necessary to gradually master new methods, try to introduce them into the work as harmoniously as possible. Do not forget about many nuances, including the lack of haste, complete adequacy and responsibility.

There are some of the most popular types of analysis:

• Fundamental.
• Technical.
• News evaluation method etc.

Each option has its own nuances. Therefore, for the specific needs of the trader, you will definitely be able to choose ideal method which will bring him positive results.

We must also learn to choose time scales. The psychological component is also very important. The user should consider market analysis as a useful tool.

It is IMPORTANT here to perceive all the information that has been received as objectively as possible. This will allow you to make the right decisions. Basic knowledge plays an important role.

Some beginners do not know the basic rules of work, do not follow generally accepted rules. Due to the desire to earn money quickly and lack of experience, significant errors, subjectivity, etc. can be made. Therefore, analytical actions must be approached soberly and prudently.

Technical analysis of binary options

Don't let this phrase "technical analysis" scare you - we are not at a lecture on "mathematical programming" and, accordingly, everything is much simpler.

It is a prediction of how asset prices will behave in the future using special indicators, trend lines, bottoms and tops, and other similar moments.

There are some interesting features of this method, the study of which will make the work more stable, successful in all respects.

The main components include:

• trend lines.

They are used to draw lines through those points where the cost will reach the minimum and maximum values. The correct line must pass through at least three highs and lows.

It can be used to build special triangles, visual demarcations in the area of ​​resistance, support on the charts.

• Triangles.

These are common figures for conducting such an analysis. They are formed by two trend lines. There is an ascending type triangle where you can see all the necessary high and low lines.

The asset price will move between the corresponding lines. Gradually, there will be an approach to a special point of convergence. The closer it is, the sooner the time will come to break through the line.

• Candles.

A very popular form of presenting price changes for specific assets. They form some figures in the chart, which demonstrate the direction in which the price will change.

• Bollinger bands.

This is another popular indicator. It includes several bands. You can use this indicator if the price fluctuates in a specific range. This will make it possible to determine the upper and lower price limits.

• Oscillators.

These are momentum indicators that can be quite useful for serious traders.

If you figure out how to do technical analysis on binary options, you can reach a new level. In principle, there is nothing too complicated in this type of analysis.

Many modern brokers offer a variety of tools on their platforms that can be used for technical analysis.

Not everywhere the set of tools is as complete as possible, but their base is enough to get the desired result. Also, special training materials are often presented there, which will make it easier and faster to master all the wisdom of this procedure.

Many traders are realizing the benefits of good analysis because it can actually increase the chances of making a profit, and to a large extent.

Binary options analytics online

“Why is it necessary to analyze?” maybe you ask...

With the help of high-quality market analytics, you can get a significant amount of useful information necessary for conducting effective, high-quality trading. It is a means and methods that allow you to understand how the price will behave in the market.

Often, ready-made forecasts, special signals are used here, which are determined by the relevant information agencies, specialized services.

In order for a beginner in the world of trading to improve his performance, he must learn how to use analytics. It is often provided directly in real time, which can be an extremely convenient feature.

You can earn without spending the maximum deep analyzes. It should also be understood that simply studying books, watching training videos does not always help to achieve the desired results.

But with the proper use of market analytics, you can increase your chances. Practice is the best tool for captivating income.

SIGNALS are a very important analytical tool. They may be short term. They are alerts that are generated automatically, and are based on the work of special indicators.

Usually, the user can set some indicator combination, which will be the main one for the strategy of a particular signal. Some services offer free signals. They are formed on the basis of various types of analysis.

Options Analyzer

Special programs will help you work with BO.

With its help, virtually every trader gets new opportunities. It, in fact, is a special program that is extremely easy to use even for novice users.

The main task is to significantly simplify the work with the trading platform of a particular broker.

Thanks to the quality software in this format, the user will be able to save his own time for regular viewing of current news, the study of complex strategies, and the like.

You can use a reliable analyzer that will bring the appropriate results. In skillful hands, it can be a stable trading tool.

The MAIN thing is to choose an adequate program for work.

How to read binary options charts?

Here, as elsewhere, there are nuances. Successfully reading charts is an important skill. It is necessary to understand what factors indicate an increase in the price or its decrease. The best option there will be a selection of several assets for work and their thorough study.

It is important to understand how they might behave in terms of basic analytical methods. To understand how to deal with charts, you need to learn all the basic forecasting methods, basic indicators.

With the help of relevant literature, it will be possible to find out all the necessary nuances regarding reading. You can also take specialized courses.

Special iq option analyzer

This broker's website offers not the most convenient and not at all functional analyzer. And do not believe that it is currently considered one of the most popular and sought-after software of its kind in the respective market.

In order for it to start working, you must first register on the official website of the company, fund your trading account, etc. After that, it will be easy to use the analyzer. Although I would not recommend such a program.

It is usually downloaded as a separate program and installed on a computer. As you can see, preparation for work is quite simple.

The analyzer is a special resource on which a variety of useful information is posted on a regular basis in the form of free, but far from correct forecasts for major assets.

Information is displayed as statistical trades from experienced users for a specific index, currency pairs, etc.

The disadvantage of this type of resource is the lack of information regarding the collection of such a statistical base, but this is a minor drawback, because traders should be interested in the result. His main task should be to get a stable income on the trading platform, but he does not cope with it.

The principle of operation is very simple. You just need to go to the page with the desired asset, after which the system automatically offers a signal. The program will give advice when it will be necessary to start an active acquisition or active sale selected asset.

This forecast is characterized by low accuracy, which does not allow you to receive at least some income. After receiving the corresponding signal, you need to go to the site trading platform, choose an option with a short expiration time.

The analyzer turns out to be quite an unsuitable option. The percentage of accuracy varies, but most often it is low. This is a bad help for traders, and even more so for beginners.

In addition, all responsibility still falls on the user. Binary options analytics is a very specific nuance that needs to be well understood.

It is much more logical to master all the features of chart analysis. Now the analysis of binary options charts can be one of the most productive tools in the hands of any user. Having such knowledge will increase the percentage of successful transactions.

Binary options analysis and its main advantages

When receiving information on BO, a trader, first of all, analyzes it, looking at how useful it can be for him.

This process is the processing of specific information that may be useful to a particular trader. Fundamental and technical analysis are very useful if you know how to use them correctly.

They provide several important benefits:

• Opportunity to get the most exact information about how the price of a particular asset will behave in the near future.
• All the opportunities to develop the necessary qualities in yourself.
• Increasing the percentage of winning trades, etc.

A quality analyzer can be a good additional tool that will further increase the chances of ultimate success.

Fundamental analysis

And, finally, it is impossible not to recall the importance of fundamental analysis!

He represents a very effective tool, which determines the value of the shares of various firms. To do this, forecasting market dynamics is used.

External and internal factors can be used as the main parameters for the assessment.

The analysis involves the implementation of a forecast regarding the dynamics depending on the actions of the macro economic indicators states, for example, the activity index, GDP, as well as on the basis of events that affect the dynamics, etc.

Here the focus is on indexes. business activity and indicators of the macroeconomics of various states. Thanks to him, you can outline a rough plan of action for about a week.

In principle, nothing complicated, if you delve into the topic. The main thing is to understand that only the ability to analyze qualitatively can make you a successful trader: BO trading is not a lottery to rely on one intuition. However, I wish you good luck! Nothing without her either.

What is technical analysis? Something without which it is impossible to predict the price movement. For several hundred years now, thanks to him, millions of traders have been pretending to be smart and trying to figure out where the price will go.

How else? If you're a rice trader on an ancient stock exchange, then you need a way to predict when you can profit and when the market should be bypassed. And it doesn't matter that around the 18th century, the toilet is on the street, and before the invention of the telephone, another 200 years.

The first obstacle - the word "technical", often scares away. The title is very unfortunate. For when you dig under the hood of a car, is it not less than a “technical analysis” of a certain mechanism? He is the one.

But with technical analysis in binary options, forex or the stock market, everything is different. Here the analyst works with the price movement according to the chart and learns to find all the necessary patterns of this process.

In the West, they are also called chartists, from the word "chart" - graph. In general, replace the word "technical" with "graphic" and it will be less scary.

Technical analysis is when you poke a pen into the screen (just kidding).

Why does technical analysis work at all? How do dashes on a chart determine price movement? Everything that is on the chart is just a balance of supply and demand. When demand greatly exceeds supply, or vice versa, trend.

In other words, in technical analysis we are doing nothing more than studying the life of the market, its emotional state, the optimism and pessimism of traders.

So the technical one can be safely replaced with “behavioral”, “graphic” or even “emotional”. And the one who came up with the “technical” to scare newcomers should be spanked.

History of technical analysis

It's much older than you might imagine. For example, some of the provisions of technical analysis were developed by Joseph de la Vega in the 17th century, for trading in the Dutch markets.

In the 18th century, Homma Munehisa, a Japanese rice merchant, developed what would become modern Japanese candles. Just imagine - these candles have been working for over 200 years.

In the 1920s, Richard Shabaker published several books on technical analysis, which developed on the work of Charles Dow and Peter Hamilton in their books Stock Market Theory and Technical Analysis of Markets.

Finally, in 1948, Robert Edwards and John Magee published the legendary book Technical Analysis of Stock Trends, which is still republished by Amacom and has taken the most honorable place in my book. electronic library.

Early technical analysis was based solely on graphical methods, since computers and statistics were, to put it mildly, strained. And Charles Dow - he generally started with charts like “tic-tac-toe”.

In the late 19th century, Charles Dow developed what was later called “ ” and became the basis for modern technical analysis. The Dow Theory still works as it did on the first day. , William Gunn, Richard Wyckoff - all these guys at the beginning of the 20th century created what is still used today. Over the past decades, many new technical tools and theories have appeared, as computer technology has made an incredible leap forward.

Industry

The main industry organization is the International Federation of Technical Analysts (IFTA), which, by the way, was the chairman for several years. The United States has the Market Technicians Association (MTA) and the American Association of Professional Technical Analysts (AAPTA).

Similar organizations available in the UK, Canada, Australia, etc. In addition, the MTA offers a 3-level Chartered Market Technician (CMT) exam.

Fundamentals of technical analysis

Technical analysis is very versatile. These are charts and models, technical indicators and oscillators, a combination of various techniques and methods. This is volume data. But in all its diversity, there are only three key postulates:

• all factors affecting the price are already included in the chart;
• the price always moves in trends;
• history repeats itself.

Let's run through them.

Everything is included in the price

The price and its movement, which we see on the chart, already include all the factors that influenced it.

That is why it is possible to predict the price movement of FB (Facebook shares) without having the slightest idea about the economic condition of the company, its balance sheet, what financial indicators.

In fact, the price includes the ratio of supply and demand for a certain asset, be it a stock or a currency pair - and this would seem to be enough for a technical analyst.

However, one must strive for universality. It is important to combine methods. It is not necessary to delve into the depths of fundamental analysis, but it is necessary to know what important news is coming out today.

This is what different ones are used for. One of them is located under my . News with “three heads” usually gives the market an impulse that is very difficult to predict with “naked” technical analysis.

The price is trending

The second important aspect. The price, one way or another, always moves in a certain, clear direction - a trend. Trends are what make money. That is why all these proverbs in books like “the trend is your friend”, etc.

The vast majority of strategies are based on trends. Moreover, each trend consists of small microtrends. But we will talk about this in more detail a little later.

History repeats itself

What happened before will happen again. This is why candle patterns and reversal patterns work. The price is cyclical in nature, as market participants have a similar psychology and repeat their actions, over and over again.

That is why many models work that were developed in hoary antiquity. Let's say this trend reversal pattern " W” is more than 100 years old - and the screenshot was taken a few days ago. This is such a time machine.

Assets

Technical analysis works for any assets (example):

• currency pairs (EUR/USD);
• shares (AAPL);
• indices (S&P 500);
• futures (CL);
• raw materials (UKOIL).

Technical or fundamental analysis

There are 2 schools of market analysis - technical and fundamental. Although there are funny things like, mom help me, “” (trading by the phases of the moon; no, no, I'm not even kidding). Adherents of these methods like to argue, but, in fact, for a successful forecast, you need to be friends with both.

In technical analysis, only price movement decides. How it moves, with what speed and amplitude, what is the impulse for its growth or fall, what candles are formed at the same time, and so on.

Fundamentalists love economic factors. In the case of shares, this is the balance sheet of the company, the balance sheet working capital(the movement of money in and out of the company, aka cash flow), profit and loss statements, and the like.

In fundamental analysis, large timeframes are preferred, sometimes for a year. In technical analysis, you can successfully work even on a 5-minute chart.

For us, in binary options, technical analysis with the addition of fundamental is just what the doctor ordered. We work according to the canons of technical analysis, view important news and this will be enough.

Trends

The basis of the fundamentals of technical analysis is the trend. This is the price movement in a certain direction.

Up trend:

Down trend:

Between trends, the price likes to rest in a sideways movement when there is no trend as such:

Wavy Trends

Unfortunately, if the trends were straight as an arrow, your cat could also earn. However, trends rarely go straight. Usually this is a combination of high and low levels, of which the trend consists.

For example, an upward trend can often be decomposed into such micro-waves:

At the same time, in reality, the waves, of course, are not as beautiful as in the diagram, and in an even beautiful trend, the price rarely moves (although sometimes it happens).

Trend Duration

All trends can be divided into:

• short-term;
• medium-term;
• long-term.

To determine the duration of the trend, you need to use higher timeframes. In the classical theory, trends are divided into annual, monthly and daily trends. But this is true, in general, for stock trading.

In binary options, as a rule, it is enough for us:

• determine the long-term trend on a 1-day chart;
• medium-term will be at 1-4 hours;
• short-term at 5 and 15 minutes.

Thus, we observe the oil painting when one long-term trend consists of several medium- and short-term ones.

This is often a rookie mistake. They set one frame, like 5 minutes, identify trends, but forget to identify medium and long term trends. And then they wonder why the price suddenly reversed on the 5-minute. Yes, because on a different frame the picture looks different.

Let's say what do you see in these 5 minutes? The price, like crazy, falls down after a sideways movement? Undoubtedly.

However, let's look at the same pair at 4 o'clock.

It turns out that our 5-minute “sustainable downtrend” is just one red candle. And the trend, medium- and long-term, has been going up for several weeks. Therefore, our 5-minute "trend" is temporary and short-lived.

trend lines

This is simple and efficient technique identifying trends. It is enough to draw a line on the maximum candles to determine the further price behavior. Trendlines help to determine not only the trend, but also its reversal.

For a downtrend, the line is drawn at the top:

For an uptrend, respectively, the line is drawn at the bottom:

Price behavior immediately becomes more orderly. It will either rebound from the next touch with the line, or it will break through it, after which the trend can be considered completed.

Channels

The channel is a development of the idea of ​​a trend line, which is very popular. Prices often move in such channels and give us a lot of opportunities to trade.

The channel can go up, down or be horizontal flat(most delicious). Trades in the channel are conducted until the price breaks through it.

There are a lot of advantages - you can immediately see the direction of the trend, the walls of the channel act as points of the price “rebound”, in general, everyone is happy.

Pay attention to the shadows of the candles - they suggest where in the channel it is best to enter.

You can and should use the channel according to the trend.

The two main thoughts about trends that you will find in books are:

• the trend is your friend;
• don't work against the trend.

Support and Resistance

After trend and channels next important question- these are the lines (levels) of support and resistance, abbreviated as “p / s”. These are conditional lines, from which the price “bounced” earlier.

• Resistance is the line that is drawn at the top. It "resists", does not allow the price to rise.
• Support, on the contrary, does not allow the price to fall lower and “supports” it.

Why? This is a matter of psychology, as well as the balance of supply and demand. No one wants to buy at such a high price? This means that the price does not rise above a certain level. For the time being, for the time being. Until a buyer comes who has seen enough positive news and began to buy and buy again. Result? The price is going up.

If the price confidently “breaks through” the line, then the market psychology has changed, this is a breakdown. And soon the market will find new support and new resistance.

The Magic of Round Numbers

The psychology behind these lines can also be judged by how often these lines form on round numbers such as 10, 20, 35, 50, and especially 100. These psychological levels force traders to buy and sell again and again.

Let's say the share price is $120, it drops and approaches $100. Many traders begin to buy despite the fall, being sure that the price will not be able to break through such an important psychological barrier with the number 100. This often happens.

As a result, the price reaches an even figure and “bounces” from it, being unable to cope with it. This is how the support line works, which seems to “support” the price from below.

The reverse picture is also true, when the price rises, reaches 100 and bounces down. This is how the resistance line worked, which “resists” and does not allow the price to move further.

Role reversal

Sooner or later, the support or resistance level will be broken. The price will inevitably have enough strength for this. Then their roles change. What was resistance becomes support and vice versa.

Any price always has its own level of support and resistance. Sometimes the so-called “false breakdown” occurs, when the price tried to break through the p / s, but it failed.

Many traders only trade support and resistance lines. This is the most important concept in technical analysis, maybe even the most important. The more often the price bounces from a certain price level, the more reliable it is, especially on higher frames.

However, the breakdown of the line will take place sooner or later - so do not expect the price to bounce off the lines forever, like a ball.

In addition, important news gives the market such momentum that it breaks through even the most reliable f/s. Therefore, you must be constantly up to date with major economic news. Even in order not to trade at the time of the announcement of, say, economic indicators (the same “3-headed” news).

Support and resistance channel

It will be a mistake, among other things, to always wait for an exact rebound. Usually the price hangs around the support and resistance lines in a small channel. That is why, instead of lines, a channel is often drawn, which covers the shadows of candles that “felt” the line, but could not break it.

Focusing on such a channel, it is easier to understand where it is better to enter on a rebound in binary options and with what expiration.

Volumes

Price movement is displayed various types graphs, the main ones are only 3:

• candle;
• linear;
• bars.

Candlestick chart

The candlestick chart was invented by the gloomy Japanese from the picture at the beginning of this article. A candlestick is a very effective indicator that shows a selected period of time over which the price has moved.

The candle structure looks like this:

Candlestick analysis

Since a candlestick is an indicator, it means that it should show something more than just price movement per timeframe. And there is. That is why there is such a discipline as candlestick analysis.

For decades, it has been studying the types of candles and their combinations, which make it possible to judge the change in the nature of the price movement.

Both candles of a certain shape and their combinations are used.

Candle combination “bearish engulfing”:

There are hundreds of candle combinations. You don't need to drill them. In practice, when contemplating a chart, you need to select several combinations that caught your attention and learn how to find them in different conditions and on any timeframes.

The classic of candlestick analysis, the book “ ” by Steve Nison can be downloaded on the forum.

Price action

There are a huge number of candle combinations. There are several hundred of them in Neeson's books alone. However, here's the thing. All these books, being technical analysis classics, were sometimes written several decades ago.

But the markets have changed a lot since then. Now 70% of the trades that we see on the charts are carried out by high-frequency robots. Millions of traders trade from home without leaving their chairs.

That is why price action is becoming more and more relevant. This is cutting-edge candlestick analysis for the fast markets of the 21st century.

Well-known Western traders, such as, and many others have developed their own price action systems, which should be studied only after you have learned the basics of technical / fundamental analysis.

Price action translation example from Neil Fuller with his comments:

line graph

Linear - the simplest chart, just a line, which allows you to quickly determine the direction of price movement. The line is formed by combining closing prices for the selected timeframe.

As a result, on a linear one it is impossible to see highest price for the selected time period (timeframe) or the opening price. However, the closing price is considered a more important indicator.

A line chart is only suitable for quickly determining a trend.

bars

Bars are loved by Western traders, and many strategies are focused specifically on their use. The principle is the same as for candles, but a different visualization method. We see the opening and closing prices, the maximum and minimum price for the selected timeframe.

In general, it doesn’t matter what to apply - the main thing is that it helps in your forecasts.

The most popular is, of course, the candlestick chart. As for exotic charts, such as Renko, Kagi or tic-tac-toe, they are very rare and are used by experienced fund managers.

Technical analysis figures

History repeats itself - that's what we started this article with, remember? It is on this concept that the theme of price figures is built. These figures are repeated constantly, and many of them signal the same thing.

Of course, there is no figure that will always, 100% indicate the correct price movement. However, they are extremely useful in analysis. If you find them patiently, they will show excellent results.

All figures are divided into:

• trend figures;
• reversal figures.

There are many figures and we will consider only the important ones.

Remember it's important. Reversal patterns work mainly from the 15-minute timeframe and after a fairly strong trend.

In the lateral low-volatility movement of the figure, almost useless.

Head and shoulders

This is the most popular figure in technical analysis. She is very old, she is described in thousands of textbooks. First of all, you should learn to find it.

The figure consists of a head - the maximum value of the price - and two "shoulders", they are also intermediate peaks. Scheme:

In reality, the price will not be as beautiful as on the diagram, so it is enough to simply focus on peak values ​​to determine the shoulders and head.

Shoulders can be of different sizes, it's not scary. The main thing is that the head should be higher than the shoulders.

For the figure, you need to draw the so-called “neck line”. As soon as the price goes beyond this line, the trend reversal begins.

By the way, on the live chart for drawing the head and shoulders there is a special tool Head & Shoulders (like a well-known shampoo). This is how they were drawn in the examples:

The head and shoulders is the main reversal pattern that has been around for many years. It is a must to know her.

Figure “Cup”

A coffee cup with a handle is quite common. Super-accuracy in her drawing is not required, we are not artists here. The main thing is to catch the form of price movement by drawing a line according to the rules of trend lines.

Double top: regular and inverted

A very popular figure that indicates a trend reversal. Like Head and Shoulders, it is considered one of the most reliable.

It is formed when the price tries to break through the support or resistance line twice, after which the optimism dries up and the price reverses.

Inverted double top

Triangle

It is also one of the main pieces of technical analysis that has been making money for traders for over 100 years. Triangles are of three types:

• symmetrical;
• ascending;
• descending.

In fact, the triangle consists of trend lines. In a symmetrical triangle, both trend lines converge equally at one point.

In the other two cases, one of the lines will be horizontal and act as a support or resistance line.

symmetrical triangle

Descending triangle

Breakout up, with the trend:

ascending triangle

The top side of the triangle works as resistance:

Figure “Flag”

Fairly common figures. The flag consists of an inclined channel with a “handle”:

Figure “Vympel”

A pennant can be represented as a triangle with a “handle”. Trend Pennant Breakdown:

Figure “Wedge”

As you know, a wedge is knocked out with a wedge. The figure resembles a symmetrical elongated triangle, directed in a certain direction up or down. The wedge can both confirm the trend and refute it.

As a rule, if the price goes beyond its upper line, then we are talking about the confirmation of the trend, if it goes beyond the lower line, it means its reversal. Do not forget, of course, to assess the situation on higher frames.

Triple top or bottom

Another example of a reversal pattern. There are no obvious heads and shoulders here, but there are clear three lower zones where the price bounced off the support line.

As a rule, after such a triple bounce, it is worth waiting for a trend reversal.

The figure "saucer"

It resembles a cup, just without a handle, or the handle will be of a different shape. Typically, such figures indicate a long-term price reversal and perform well on higher timeframes - from 1 hour.

We have reviewed some of the most popular figures. There are much more of them - but the article is not rubber.

Gap

A gap is such an empty space between candles. It appears between trading periods, including between Friday and Monday. Another option is due to an excessive price difference between two trading periods (relevant for stocks). Gaps also appear with a very strong “jump” in price.

There are three types of gaps:

• to break (accompanied by increased volumes);
• breakaway (in a very strong trend);
• at the end (shortly before the price reversal).

Gap trading is another subsection of technical analysis, so I'll cover it in more detail in a separate article (this one is horse-sized anyway).

In any case, gaps are needed, first of all, for forex and the stock market, they are rarely used in binary options.

moving averages

Price rarely moves evenly. Usually this is a wave-like, and sometimes completely chaotic movement, in which it is sometimes difficult to find a trend. To deal with this problem, moving averages are used.

This, in fact, is simply the average price level for a certain period of time, such a “average temperature in the hospital”. Thanks to the moving averages, chaos turns into a smoothed orderly movement, and here it is, right in the palm of your hand.

Types of moving averages

There are several types of moving averages, the main ones are:

• MA (Moving Average) - moving average;
• SMA (Simple Moving Average) - simple moving average;
• WMA (Weighted Moving Average) - weighted moving average;
• EMA (Exponential Moving Average) - exponential moving average.

However, you can not stress. The differences between them are not so pronounced. Here are three moving charts from a live chart. As you can see, the sky did not fall on the earth:

In fact, some moving averages are just a little faster than others, say the EMA is faster than the SMA, just less smooth. So, on short expiration periods, you can choose faster moving averages, and on long expiration periods, slow ones.

For special innovators, TradingView has an indicator CM_Ultimate_MA_MTF_V2, which uses 8 moving averages at once:

• SMA (Simple Moving Average).
• EMA (Exponential Moving Average).
• WMA (Weighted Moving Average).
• HullMA (Hull Moving Average).
• VWMA (Volume Weighted Moving Average).
• RMA (Moving Average in RSI).
• TEMA (Triple Exponential Moving Average).
• Tilson T3 (Tilson T3 Moving Average).

But it’s better not to get too carried away, sorting through their varieties.

Using moving averages

Moving averages are used to identify three key situations:

• trend;
• trend reversal;
• support and resistance levels.

It is the moving average that allows you to quickly understand what is happening with the asset, whether it is growing or falling. Let's say we set MA 42 and the 4-hour chart takes on a completely different shape.

In this case, the moving average MA 42 worked as a reliable resistance line for EUR/USD for several months. Well, when the candles crossed the line, the trend is over.

Another method for determining the trend is paired moving averages, one short-term, the other long-term. Let's say if MA 5 is located above MA 25, the trend is going up. And vice versa:

Moving price reversal is determined in two ways:

• when candles/bars pass through the moving average;
• when the moving averages cross.

Let's say after the candles crossed the MA 50 on the 1-hour timeframe, it began to fall:

And of course, the most popular application that you should already be aware of is moving average crossovers. It is used in a wide variety of strategies.

For example, the intersection of MA 15 and 50, plus reversal marubozu already familiar to us.

At the same time, the intersection of moving averages with sufficiently small values, such as 15 and 35, may indicate a short trend reversal. But when powerful MAs like 50 and 200 intersect, it already smells serious.

Of course, in a flat - when there is low volatility - there is no need to focus on intersections.

What moving averages to use?

There are a huge number of strategies with them. Some of them are already described on the site:

Often they are selected by hand. Change the values ​​until the moving average becomes support or resistance, or shows the picture you need. You can also take the universal version of the “long-playing” version, like MA 100 or 200.

Moving averages are very popular technical tool, which can be found on any professional chart. Therefore, its use is, in fact, mandatory.

Indicators

As you can see, I describe the indicators at the very end. Why? Because this is where they belong. Beginners do everything the other way around: instead of studying support / resistance lines and the basics of technical analysis, they throw a bunch of indicators on the chart with a frantic look and get this “beauty”:

Indicators are actually a useful auxiliary tool, nothing more. They help to see the price movement and its volatility from a variety of angles. There are two tasks for any indicator:

• confirm the trend;
• confirm the reversal pattern/pattern.

All indicators presented on a live chart or in any terminal are lagging. This means that the indicator does not predict anything, always follows the price and simply displays the past.

One of the most popular indicators is oscillators.

Oscillatory indicators

These are one of the most popular types of indicators. They are displayed on a conditional scale, usually from 0 to 100.

• the closer the value is to 100, the more the asset is overbought (a fall is expected);
• the closer it is to 0, it is oversold (rising is expected).

Crossings and divergences

These are another signals that indicators often give. We have already talked about moving average crossovers earlier. The same is true for other indicators, like ADX.

The ADX crossover confirms the trend reversal:

Divergence is another popular condition for many oscillators, when the direction of the indicator and the price diverge, which indicates an imminent trend change.

Indicators give a lot useful information. They help to calculate the strength of the price movement, the direction of the trend, volatility and many other indicators.

As a rule, professional traders use, at most, 1-2 indicators, but honed to perfection.

Trading simply on the indicator, however, it is forbidden, since this is just a mathematical abstraction, carried out with living matter - the price. Therefore, any indicators are used in conjunction with technical analysis, candlestick patterns, and sometimes with other indicators.

Popular indicators

Let's take a look at a few popular indicators that are often used by professionals in technical analysis.

Accumulation/Distribution (A/D)

One of the most popular volume indicators, in which the price movement is compared with the trading volume for the same period.

This joy is only available for stocks and indices, so do not try to use it with currency pairs. Alas, for currencies there is no reliable data on volumes, what you want is an unregulated interbank market.

But for stocks, A/D is often used and is found in a wide variety of strategies.

A/D is used to identify trends. If the A/D line is going up, this is an indication that the buying power is getting stronger. At the very peak of A/D, we should expect a price reversal after a period of consolidation.

Average Directional Index (ADX)

An indicator to determine the strength of the trend. It does not indicate its direction, but how strong the current trend is.

On a live chart, ADX is called Directional Movement. It consists of several lines:

• positive direction indicator +DI;
• negative direction indicator -DI.

A plus sign shows the strength of an uptrend, a minus sign shows the strength of a downtrend. The data is displayed next to the ADX line on a scale between 0 and 100.

You can understand the essence, of course, on the trend. Here's how it is here. Steady downtrend -DI after crossing above 40, +DI below 20, the ADX line tends up, indicating a strengthening of the downtrend.

Aroon

This is a relatively new indicator created in 1995 (most were developed back in the 70s). The indicator is a trend indicator, its task is to show the presence of an outgoing or uptrend, as well as its strength.

Aroon is also used to determine a new trend. The indicator consists of two lines, red and blue.

The blue line displays the period of time that has passed since the price reached its maximum value for the specified period of time. Red, respectively, is the opposite. In this case, the time interval changes depending on the selected timeframe.

A classic use case for Aroon is a trend reversal. After a long period, when the blue was at the top and the red was at the bottom, they cross and a trend change begins. For example:

MACD

One of the most famous indicators in technical analysis, which I have described in detail here:

Using the strength of moving averages, MACD is usually used at intersections:

RSI

Also a very popular trend strength indicator, described here:

Used for overbought and oversold:

On Balance Volume (OBV)

Another well-known technical indicator for stocks and indices, it can be considered a trend indicator. Very simple and visual.

It works simply, it takes the total volume for the trading period and assigns a positive or negative value depending on the price movement during this period.

When the price is up, the volume is assigned a positive value, down - a negative one. The total positive or negative value is then added to the sum obtained from the beginning of the measurement.

In OBV, the main thing is not its value, but the trend of its line itself. If it shows a steady growth, it should also be expected from the price. If the indicator line is sadly bored without a clear direction, the same happens with the price.

Stochastic

This is probably the most popular oscillator in the world. And, it just so happened that it is very close and understandable to me, which is why it is often seen on my screenshots. Described here:

In general, this is an indicator of momentum - the strength of the price movement. In a strong trend, the price approaches its trading ceiling, which hints at a subsequent reversal.

Therefore, the main thing they look at in stochastics is the overbought and oversold zones. This is my favorite indicator to complement the foundation of technical analysis.

It is also quite good at divergence, for example:

Technical analysis: results

Pink ponies are pooping butterflies. Joke. It was a check to see if you read the article to the end (I suppose you just squandered it). Let's briefly summarize what technical analysis is.

• All factors are included in the price, it moves in trends, and history repeats itself.
• The price has everything you need to know.
• Technical analysis should be combined with fundamental.
• The price moves in trends: up and down, or is in a sideways movement (consolidation).
• The trend line is the simplest technical analysis tool.
• A channel is two trend lines that act as support and resistance.
• Support keeps the price from falling, resistance - from rising.
• Volume is the number of shares or contracts traded. The larger the volume, the stronger the trend.
• There is no normal volume in forex (currency pairs).
• There are three main types of charts: candlestick, line, and bar charts.
• For binary options, timeframes up to 1 day are used, for forex and stocks - up to a year.
• Technical analysis figures help to find a price reversal.
• The head and shoulders are the main price reversal pattern.
• Cup, double/triple top, triangles, flags and pennants are examples of other patterns.
• A gap is a gap between trading periods or when the price moves sharply.
• The moving average helps identify trends and smooth out market noise.
• The indicators are based on a formula that takes into account price movement and volume.
• Popular indicators are A/D, Aroon, ADX, MACD, OBV, Stochastic, RSI.

As you can see, technical analysis is a very broad topic. It has been studied for months and years. But - it shouldn't be for you theoretical discipline. Yes, technical analysis is tormented scientifically in scientific circles, and in magazines like Stock and Commodities you will see such examples of technical analysis that you won’t fall asleep after them, but for you and me, this is the most real, most practical thing in the world.

Little secret

The main thing I want to advise you is to avoid the mistake of a beginner who throws 10 indicators on the chart and tries to predict something in this way. The market is a living mechanism, it is nothing but the reaction of its participants. On the charts we see the market balance of supply and demand. Indicators are ordinary mathematical formulas, very simple. They cannot predict the global market. Therefore, in order to succeed, you need to correctly use the entire arsenal of tools: from news, candles, trend lines and F/S to reversal patterns, price action and certain indicators.

And a little secret from the future. You will go a long, difficult way. Try dozens of indicators and candle combinations until you realize that they are all essentially equal. And they are not important - but you yourself and your trading psychology. This is why two traders can put the same moving average on the same chart, and then one will give a correct forecast, and the second one will not.

After some time, when your head bursts from knowledge, you will inevitably do the main thing - throw everything out of your head and begin to perceive the chart with a fresh look. And then a small miracle will happen - you will see the good old instruments with completely new eyes. Trendlines, reversal patterns, moving patterns, candlestick patterns will suddenly appear before you in a completely different light. Months of experience and thousands of trades will turn them into something amazing that you didn't see point-blank when you started.

Trading is magic. In all aspects. The ability to work anywhere in the world with a laptop on your lap, the ability to earn more in an hour than you earned in a month, sitting out your pants at your last job. So become a magician and wave your magic wand of technical analysis so that this limitless reservoir of financial opportunities will share a drop of life-giving moisture with you. At this artistic finale, I retire into the sunset *positive music playing*.