CHAPTER 2 OF THE TRADING COURSE OF BINARY OPTIONS, FOREX, SHARES, COMMODITIES, INDICES AND CRYPTOCURRENCIES (TYPES OF TRADING ANALYSIS)

To know if a Stock, currency, commodity, index or Cryptocurrency is going to go up or down, it is necessary to do analysis of the same that can be technical or fundamental.

Next we will see what each one is about and how they are to a greater or lesser degree applicable to the trading that we are dealing with in this course and that you can remember them in our first chapter following this link.

TYPES OF ANALYSIS PERFORMED IN THE TRADING

Basically there are two types of analysis when we analyze a graph at the time of trading as we pointed out in the previous paragraph and these are: technical analysis and fundamental analysis.

TECHNICAL ANALYSIS

It is the one that is realized on the graphs to understand the movements of the price, are used in many cases, indicators, they apply theories like the waves of Elliot, waves Wolf, Chartism figures, patterns of the Japanese candles, harmonic patterns, etc.

 

FUNDAMENTAL ANALYSIS

It is the way of looking at the market through the economic, social and political forces that affect supply and demand.

These two types of analysis are not opposed and trading experts recommend that both be performed. Some traders prefer to avoid trading during relevant news because volatility is huge in many cases and may lead to increased risk of losses.

Both forex, stocks, binary options, commodities trading and indices are widely used both analyzes, the additional used in stock trading are level 2 and TAS, which are tools of the centralized stock exchanges provided by some brokers and the Fundamental analysis is based not only on the information about a particular company, but as economic, political and social aspects influence the sector to which belongs the action that the trader is analyzing.

Special mention should be made of the technical and fundamental analysis of the Cryptocurrencies since, being such a new market for trading, and constantly breaking the historical highs, technical analysis is not as reliable as in traditional trading Has worked because in the psychology of the traders makes them, respect certain rules of technical analysis, not so in the trading of the cryptocurrencies, where it is constantly read that they simply rely on buying cheap to sell expensive without entering analyze Means that a cryptocurrencies is cheap or this expensive (expensive), which is a mistake and shows that trading is almost done as a face or cross bet.

I think that within the most correct analysis for cryptocurrencies is the fundamental analysis when studying each currency with its own objectives, news of the adoption or not in countries, in the development of particular technologies of each cryptocurrencies, projects of creation of the same, etc. Now, I am not saying that technical analysis can not be applied to trading of cryptocurrencies, on the contrary, we must apply it every day more, but it should not be taken to 100% since the first steps are being taken to incorporate all the Traditional trading education to cryptocurrencies and the more it is applied, the more effectiveness will be achieved over time, remember what was written above, technical analysis works to the extent that more traders apply the principles of such analysis.

Clarified the point above step make some considerations on the basis of misleading offers that I have seen in social networks and questions that usually make many people who may not know the topic of trading. Here are the considerations:

• No one knows for sure and with 100% of effectiveness what is the currency, stock, commodity or cryptocurrencies that will rise or fall of price, what is possible is to have a good forecast of the direction and with a risk management, a system Entry and exit operation and a strong psychotrading ... you can achieve success in this world of trading.
• No one knows for sure how far the price of a currency, stock, commodities or cryptocurrencies can go back or how far its price will go .... What you have is a forecast of what can happen, based on fibonaccis extensions and regressions, Supports and resistances, indicators, application of  Figure chartist , application of theories such as Elliot, wolf waves, etc ...
• To predict if a currency, stock, commoditie or cryptocurrency will go up or down, it is necessary to do a technical analysis and fundamental, and in the particular case of the cryptocurrency one has to know the projects that the cryptocurrency has that at a certain moment can do To be revalued, for example a cryptocurrency that foresees the launch of some platform or project in a determined date can serve as guide for the monitoring of the price.
• There are traders who do not operate on fundamental news because high price volatility can lead to huge losses, but there are traders on the other hand who only operate when there is fundamental news as they ensure that the price is not going to be in range but the Price will rise or fall and in those ups and downs are huge opportunities to win.
• Unconsciously you do a fundamental analysis when there is a huge fall or rise in price for example with the cryptocurrencies and try to find out what was the reason.
• In order not to panic that is normally seen in social networks, the trader must have a trading system, a risk management, a strength in his psychotrading, with it he will enjoy trading because he has knowledge of what happened, of what What is happening and what is likely to happen.

GRATITUDE

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Introduction that you can see in the following link

Chapter 1 Generalities that you can see in the following link