Trading Tools

Trading Tools

Trading Tools

 Through my daily life playing binary options, I’ll be using a few tools of the trade and I might refer to these tools in my blog journal. Here on this page I will describe the tools I use and their function.
 

If you intend to put any effort into trading binary options and want to give yourself the best chance of winning, then it is suggested to use a few trading tools to help yourself. I think most traders would agree that the single-most important tool are charts.  The brokers you will use, even the good ones, use barely acceptable charts. They enable you to know when to place a ‘put’ or a ‘call’ but that’s about it. 
 
 
 This page is strictly for analysis of platforms and the systematic tools I have used or am using for binary options trading. This section is not going to discuss strategy and the many strategic systems out there. You can find out about binary options strategy here. Or if you would like to know about tried and trusted brokers, have a look here.
 

 

These are the trading tools I currently use for Binary Options. If you have suggestions for better tools or something I’ve missed, hit me an email or leave a comment/message. As I’ve mentioned before, but need to mention again, to be successful at Binary Options, you need the tools of the trade to do it properly. The chart on the broker’s platform is insufficient to make you a long-term success. What you need is consistent wins and you can only do this by giving lady luck the heave ho.

 

CHARTS – METATRADER4 (MT4)

Metatrader4 is perhaps the most important trading tool you will need. As I’ve mentioned, the broker’s platform “line” charts are insufficient. Don’t use line charts, learn about candlesticks. Many of the strategies I teach you about will assume you have a basic knowledge of candlesticks. I will explain more about them in a future tutorial, but for now you could easily read up on them elsewhere on the net – Plenty of info out there to learn.

I recommend you download and install MT4 using Vantage FX. Here is the one I use, it’s free: https://www.vantagefx.co.uk/

The free ‘demo’ account is a trial that lasts 30 days, but you can renew it easily and indefinitely.

If you don’t wish to install the software on the computer, there are alternative live charts available from different sites. They are free and you can even set up indicators on them. However, I recommend Mt4  far above these web-chart versions because you can customize them more easily and they just work better.

Sites that offer free web-based alternatives:

http://www.netdania.com/

http://www.freestockcharts.com/

http://www.investing.com/charts/

The web based alternatives are useful if you are working on a different computer or are away from home for a while, but if you’re serious about trading binary options, go with the MT4 solution.

 

Fundamental Analysis – The Economic Calendar

There are two main types of analysis for trading the markets, whether in Forex or Binary Options. These two types are technical analysis (analyzing indicators, looking for price action, etc.) and fundamental analysis (trading based on analysis of news).

You cannot ever underestimate the power of news. It affects the markets on a daily basis and in a dramatic way. Many traders trade only on fundamental analysis. The USA announces that its unemployment figures have been reduced this month, the reaction is that the markets go crazy – The moment the announcement is made, the EUR/USD goes down. Why does it go down? Because less unemployment means a better US economy, means the US dollar gets stronger, means that it does better against the Euro – And this change is instantly seen on the charts the exact moment the announcement is made.

These announcements are not made willy-nilly. They have a specific, planned release date and time. The most important economic announcements for each country appear listed on the economic calendars. There are websites that offer their economic calendar free of charge and it will update automatically the moment the announcement is made. This allows you to place a trade in the correct direction and hopefully improve your chances of winning.

Some sites that offer free and automatic instant updates are:

http://www.bloomberg.com/markets/economic-calendar/

http://www.investing.com/economic-calendar/

I prefer the investing.com chart. I find their instant feed one of the fastest (and you need that news quick!) – You can also scroll down each announcement for details on what that fundamental news is all about. You are also given an indication of how much impact and volatility that news is expected to have on the market.

 

Technical Analysis – Indicators

In many of my posts I teach you how to read indicators. In this section, I will tell you the most useful ones for you to use in Binary Options trading.

All of these indicators are free and they are already included for use on your MT4 platform charts. There are other third-party indicators that can be purchased for a small fee, but I will cover those in a different section. Elsewhere on this site under Strategies and in blog posts, I talk specifically about how to use these indicators best to your advantage, so I won’t cover that here. Instead, I will just list them.

 

Bollinger Bands

 

RSI

 

Stochastics

 

Moving Average

Donchain Channel