Patterns for Trading Analysis

IQ Option is a unique broker with a binary options trading platform. We are dedicated to providing our South African traders with top-notch security measures, state-of-the-art technological innovations and distinctive features so as to provide a trustworthy platform to enable effortless trading in South Africa.

A binary option is an simple form for trading where the trader speculates whether the price of an asset will rise or fall at the expiry time. The expiry time is an indication of when the transaction will close. A strike price refers to the price at which an asset may be purchased at a given time. In-the-money means you may profit from the transaction and that it is worth exercising, while out-of-the-money means you may be very close to losing your investment. binary options trading has become more popular in South Africa due to ease of accessibility and the innovative features it has displayed over time.

Below are the Top Five binary Options Beginner’s Tips to enable you to become a successful trader in South Africa:

1. Requirements for participating in binary options trading

As a South African trader, you should be over 18 years of age. Hence, a proof of identity is required.

A trader must be aware that trading in binary options may result in a loss. You are, therefore, advised not to invest your expenditure money i.e. money kept aside for your food, health and/or rent bills.

Traders should invest in legal tenders from their own online wallets to fund their accounts.

2. Trading procedure In binary options, traders in South Africa can participate in two ways:

Call option: Call option allows the investor to gain money when the investor predicts that the price of the asset at hand will increase in value over a given trading period.

Put option: Input option, the investor profits if he predicts that the price of a given asset will drop over a given period.

3. Assets involved in binary options To better trade with binary options, you need to understand the assets involved. They include:

Currency pairs which are available in over 25 currency pairs. They include EUR/USD/SA RAND and many others.

Indices which are securities that represent a market whereby each index has its own calculated market value.

Commodities which are inclusive of items such as gold, silver, sugar among others.

Stocks which basically share that companies own and traders buy.

4. Advantages of binary option binary options trading in South Africa does not require much experience since it’s not as complex as forex exchange.
Also, it offers high returns on your investment. It is simple as there is no requirement of downloads nor any third party involvement and it enables traders to trade in a wide variety of assets. For instance, traders can choose from currencies, commodities, stocks and indices – all in one place – on the IQ Option platform.

5. Market analysis procedure For South African traders to get a return on their investment, they must examine the market through detailed analysis of the products they are investing in.

Long term investors in South Africa rely on fundamental analysis to select the stocks to invest in. This means that they do not look at the here and now of an asset, but on broad factors that could affect the stock over a long period of time.

These factors include relevant government policies, the political and financial environment and events that are happening within a company such as changes in management. These factors are unlikely to show up in a technical analysis, but they have a major role to play in the long-term performance of a stock in the market of South Africa.

Involves studying information on the economics affecting the commodity in question that may, in turn, affect the commodity’s behaviour across the charts.
Being alert on trends affecting your commodity will help you keep track of your preferred stock. It involves charts and graphs.
Traders can determine the volatility of their assets by looking at movements on the charts. An asset whose chart movement is smooth is less volatile than that whose charts exhibit jagged up-and-down movements.

The charts may be line charts that connect data points on past prices together with a line, or candlestick charts which contain market open, high, low and close of a specific day.

At IQ Option, we advise our South African traders, to begin with, the 5/15 rule which represents the percentage of a single investment in relation to the entire capital invested and then rise to the 10/30 rule as you become more aggressive.

If you are consecutively unsuccessful in your investments, you should consider exiting the market and analysing it further so as to prevent further losses.

We hope that these Top 5 binary Options Beginner’s Tips will help you become the successful trader you are hoping to be. Even though your experience may be limited, we, at IQ Option, are confident that once you are equipped with the binary options beginner’s tips, we would have provided a platform for you to reach your dream heights.

Technical analysis is all about learning how to read the charts of the assets to be traded. Some of the popular patterns that a South African trader needs to master include: double top, head and shoulders, rising or falling wedge, pennant and triangle.

Mastering these patterns, though technical, can be achieved very fast, probably in a day or two. But to avoid making losses, a trader should never become over-confident about relying only on this strategy. Asking questions and researching further such as finding out what is in the news will increase the chances of success in trading in South Africa.

Used on its own, the technical analysis is not a very reliable technique and can mislead unless the South African trader has taken the time to invest in mastering fundamental analysis as well. Learning to read charts correctly does help; but a trader should not put too much trust in it, Otherwise, it could result in loss of money.

A candlestick represents a trading session, which could be of 15 minutes, one hour or whatever duration the trader has selected to work with. The candle has a body and a tailor wick, which comes out from either end of the candle. The body of the candle contains data of what has happened in the market throughout the entire trading session. The wick or tail shows the highest or lowest point.

There are two trends in the South African market when it comes to candlesticks; the trend continuation patterns and reversal patterns. Trend continuation patterns are false exhaustions while reversal patterns indicate exhaustion. An exhaustion candle is not a common occurrence. But when it does occur and if it is strong enough, it changes the direction of the market.

The Top 5 binary Options Beginner Tips show that the key to using the candlestick patterns is to understand how to read the candles. The colour of the candle, its length and the length of the wick on either side of the candle are just some of the critical factors a South African trader needs to master.

A new South African trader should not get excited about a strategy and plunge into it without adequate understanding as that would be gambling with one’s money. It is wise to practise using demo accounts since no real money is traded in it. Due to this, there are no losses while one is learning.

Do not try to understand all candlestick patterns under the sun, but focus on mastering two or three such that you can easily identify them in market situations and use them to interpret the trend of the market.