Notes

Technical analysis of options


Technical analysis does not investigate economic events and macro indicators, it is based on the study of graphs and the construction of conceptual theories on the development of the economy based on them. We will not evaluate controversial judgments about the uselessness of fundamental analysis, which some traders put forward on the basis of the assertion that macroeconomic indicators are already embedded in the option price.

Everyone has the right to their own misconceptions. Undoubtedly, the history of market behavior is especially important for technical analysis, on the basis of which graphical models are created. Indeed, to some extent this allows you to do without fundamental analysis. But you're not really going to give up your left hand.

Technical analysis is especially fond of lazy traders. Passion for this method allows you to omit difficult classes on self-development, the study of economics and economic news. Instead of becoming a professional in the field of finance and macroeconomics, constantly being aware of events, a lazy trader seeks to devote time to studying technical analysis techniques and, having received enough practice, work based on the received analytical apparatus.

Technical analysis of binary options omits such procedures as independent search for information, evaluation of indicators, research of their mutual influence, etc. Instead, the trader analyzes the graphical reflection of the market state, sometimes compares it with similar images for other periods. The trader makes a conclusion that is easy for him to justify, he can discuss the chart with other traders, who will only need a few minutes to study it superficially. The number of fans of technical analysis is growing especially actively due to newcomers who find it difficult to understand the subtleties of financial market research.

Traders who use several methods of economic analysis relative to one object of research are particularly respected. For example, they confirm the data of the fundamental analysis of the technical. Fundamental analysis helps them to establish the trend direction for the selected underlying asset, and technical analysis confirms their conclusions and helps to notice turning points in the trend dynamics. This approach minimizes risks and promotes successful options trading.

A trader who is aware of how important it is to double-check analytical data before making transactions can not only assess the dynamics of charts, he understands at the level of macroeconomic indicators what caused this behavior, what are the prospects for further development of this situation, how long certain factors can influence the market. As a result, the slightest changes in the charts generate an understanding of the direction of market development and allow you to more accurately predict the future behavior of the underlying asset in the market.

If it were enough to open deals to lower or increase an asset by eye for successful trading, the market would be called a casino and would be regulated by gambling legislation. There is no place for prediction games in trading. Working with the schedule should be exactly work, not fortune-telling on coffee grounds.

That is why there are limits on the number of open transactions. A person who mindlessly opens a lot of trades will not become a successful trader. He just physically will not be able to keep them conscious and track the dynamics of them.


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