Technical Analysis or Fundamental Analysis for Binary Options?

download (17)

One of the dominant debates in the financial market analysis is the relative validity of the two major tiers of analysis: Fundamental and technical. In Binary Options and Forex, several studies concluded that fundamental analysis was more effective in predicting trends for the long-term(longer than one year), while technical analysis was more appropriate for shorter time zones (0-90 days).

Combining both approaches was suggested to be best suited for periods between 3 months and one year. Nonetheless, further empirical evidence reveals that technical analysis of long-term trends helps identify longer-term technical “waves”, and that fundamental factors do trigger short-term developments.

Most Binary options traders abide by technical analysis because it does not require hours of study. Technical analysts can follow many currencies at one time. Fundamental analysts, however, tend to specialize due to the overwhelming amount of data in the market. Technical analysis works well because the currency market tends to develop strong trends. Once technical analysis is mastered it can be applied with equal ease to any time frame or currency traded.


Leave a Reply

Your email address will not be published.