Before you develop winning strategies as a trader, it is important to know how the market operates. Fundamentally, trend is the price movement of an underlying asset, and it is what creates profits and losses. The most important thing to know is that there are factors that determine the intensity of the price fluctuations in the binary options markets. Furthermore, these factors also determine the duration of these trends, which can be either short or long-term. Therefore, it is important to know the factors that determine whether the market is volatile or stable.
Supply and Demand
Supply and demand factor can affect the prices in the market because it initiates push-and pull motion of prices. Consequently, this factor affects the prices of various assets as demand and supply changes. If an asset is on low demand and the supply is high, the prices will go on a nosedive. On the other hand, if an asset is on high demand and the supply is low, the prices will be skyrocketing.
Governments hold so much power it is unbelievable. Governments have the liberty to implement monetary policies that can affect the markets significantly. When a government controls the interest rates and the amount of money circulating the market, it can control the investment capacity in the country. Therefore, when you are doing your research in one of the best binary option sites, remember to consider government policies that affect the financial markets.
Market Speculations and Expectations
Market expectations depend on future expectations by the stakeholders. Customers, politicians and investors are stakeholders, whose opinion and expectations affect the current and future prices of assets in the market. Fortunately, in binary options trade, it is possible to weigh the sentiments of a certain group using sentiment indicators. It is important to consider speculations and expectations because they play a key role in the market trends.
International Trades
Trades between nations strengthens the economy and enhances the flow of funds from one nation to another. It is important to note that a country with large share of exports have a strong economy and currency. Consequently, such a country has a lot of money in circulation in the financial markets. Notably, international trades rarely causes short-term effect in the best binary signals provider because it is subtle. The best tool to evaluate the strength of a country’s economy is by trading in the currency market.
Ultimately, the above-mentioned factors are, in most cases, dependent on each other. For instance, government policy can affect international trade. Subsequently, the effect on trade will prompt the stakeholders to speculate and except prices to move in a certain direction. Once the stakeholders receive the information, they react by either selling or buying the assets, in anticipation.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s