There are thousands of graphs available to analyze the financial markets. These ones are relevant to binary options. They allow you to make sense of market movements on short time frames, they are easy to learn, and they can quickly create profitable trading strategies. Learn more about binary options graphs here.
Which binary options graphs should I focus on?
On first sight, analyzing financial markets can look complicated. There is so much information out there that new traders find it difficult to know which information to focus on. With a few tricks, however, you can eliminate a lot of useless information, allowing yourself to concentrate on the essential, painting a much clearer, easier to analyze picture of the market.
When analyzing the market, focus on these types of binary options graphs:
Prefer candlestick charts over line charts
Candlesticks and line chart are both ways of displaying price movements. While line charts are the more commonly-known chart type, displaying price movements as a graph looking like a line, candlesticks are the chart type that allows you to make better, easier, and quicker predictions.
The advantage of a candlestick chart is that it displays more information than a line chart. When you look at a day’s price movements, for example, now chart can display every single movement of the day. Due to the limited size of your screen, the chart has to aggregate some information.
Line charts can display only one price per aggregated period, limiting the information you can get from them, potentially pointing an inaccurate picture. Candlestick charts display each period’s opening price, close price, high, and low, providing you with a full picture of all market movements, allowing you to make a better trading decision.
Experienced traders can find a trading opportunity with one glance at a candlestick chart. Even new traders can quickly develop a similar skill as many candlestick formations contain only one candlestick. Learn these formations and always use candlestick charts for your trading, and you will soon be able to understand the market significantly better.
Prefer short-term indicators over long-term indicators
Binary options are short-term investments. Consequently, long-term indicators are of little use to a binary options trader. This applies especially to fundamental indicators such as unemployment or GDP, which have no direct relevance to binary options trading.
To trade successfully, focus on short-term indicators. Focus on:
- Simple candlestick formations over complex candlestick formation,
- Short moving averages over long moving averages,
- Short momentum indicators over long momentum indicators.
Understand trends, resistances, and supports
A big part of the market movements on the short time scale of binary options is determined by trends, resistances, and supports. Sometimes, trends, resistances, and supports from longer time frames affect shorter time frames, too.
By understanding these influences, you can understand a large part of what the market does. Especially in combination with candlestick formations and a few short time indicators, you can build a strategy that is easy to execute and successful.