The Difference Between Fundamental & Technical Analysis

Would you ever consider driving a car over 100mph down the fast lane of a motorway when you have only just received your permit license?

If you are like most sane people, your answer should be a resounding no.

Unfortunately, when it comes to trading Binary Options, many people upon getting a grasp of the basics of Binary Options (which we covered in the previous post) will go straight out and try put some large trades on various financial markets.

In the world of Binary Options, this is the equivalent of driving that car 100mph with very little knowledge of what you are going.

And yes, whilst it is true that you can learn from your mistakes, this would be a very costly mistake to make.

Fortunately, unlike driving a car, the knowledge required to successfully trade Binary Options doesn’t take anywhere near as long to learn.

Now that you hopefully have an understanding of what Binary Options are and how to trade them, the next step is to learn how to research how a particular financial asset (be it a currency or a commodity) has been behaving and if there is any news coming out which could affect the asset in the near future.

For it is only by knowing how something has behaved in the past and if there is an expected event which can change it in the future can we build up a probable hypothesis of what will happen; subsequently making more accurate predictions.

Fortunately, when it comes to analysing whether a financial asset is going to increase or decrease in price, there are two different schools of thoughts; and professional traders in both still make very good money from their respective investigative school of thought.

The first one type which we’d be looking at is:

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