The biggest handicap of all binary options-broker is for sure the charting-tool. But in this context, it is not quite fair to talk of a handicap since the platforms are simply not intended for conducting extensive analyses. Generally, the platforms are designed for trading and placing the orders- the broker serves as a middleman between market and trader.Traditionally it is distinguished between binary options and cfd/forex platforms. This needs to be revised as there is a growing number of platforms that offer both. So in case you think that the charts for binary options are weak, you have to think again. And maybe take a look at such a broker. Our favorite is Nadex with a great software for proper chart analysis! Just click here to take a look for yourself!
Professional chart software
So, if you really take options trading seriously, you should look out for a charting alternative. Here, you also have got many choices and alternatives because a lot of tools are free of charge but equipped with extensive functions. You can choose from the following opportunities that are free of charge:
The first opportunity we want to introduce to you is the website www.freestockcharts.com. There, you find an amazing online-tool that leaves nothing to be desired. But, of course, with restrictions because you cannot query German shares with this service. In return, these charts are perfect for analysing currencies and resources, too.
As you can see on the screenshot, everything is structured very easily. With a little bit of practice you have rapidly got used to your environment and nothing is going to stop your analyses.
Etoro is a forex broker that also offers a free demo account. So, if you open such a demo account then you also have access to the charting-tool of eToro and to the live courses. The advantage of this platform is that it is immediately available online and therefore, you don’t need to install any external software. The disadvantage is that with this tool, you cannot do as much as with an extensive software. But, for 99 % of all traders, it is completely sufficient.
On the screenshot, you can see that also this platform is very simply structured and easy to use. We also provide detailed instructions in German.
Let’s come to another opportunity: Metatrader. Metatrader is a software package you need to install on your PC. It offers very extensive functions and ways to analyze and there is hardly anything the metatrader is not able to do. You can even develop your own little trading program which automatically trades for you. But just in combination with a forex- respectively with a CFD broker. At the moment, when trading with binary options this is not possible yet. The metatrader is offered by many forex brokers and when opening a trading account you will get the program free of charge.
As you can see on the screenshot, the metatrader is structured in a bit more complicated manner. But, with a little training period you can also handle this tool without any problem. Professional traders as well love the metatrader and have it in action very frequently.
Line-, candlestick and bar-charts
Let us come to the next question: Which charts should you use? Most of the trading newcomers preferably use simple line charts, particularly because of the clarity and maybe they do not know any other alternatives. Unfortunately, line charts are relatively unsuitable for most of the analyses because a lot of information gets lost. Only the final courses of a time unit are incorporated- you don’t know what happens within the time unit.
Bar-charts are much more meaningful. They consist of single bars that show the highest, the lowest, the opening and the end course. One bar shows one time unit. On a day chart, one bar stands for a whole day. On a five minutes chart, one bar stands for 5 minutes.
Nowadays, candlestick charts are very common.
Actually, the information is the same as in a bar-chart, just differently shown on the graphic. Therefore, candlestick charts are easier to capture from the unpracticed eye, too.
The single candle consists of wick, fuse and body.
Wick and fuse mark the highest and the lowest course.
The body describes the opening- and the end course. One candle can show different time periods, just as with the bar charts.
Usually, the candles are shown in colour, depending if the course in the respective time period has risen or fallen. Because of the dominant body especially the interval between opening and end course is emphasized. Therefore, candlesticks are particularly suited for those markets where this interval is very important, e.g.,in stock markets. In markets where people trade around-the-clock e.g. in the forex market, bar-charts often make more sense.
All in all, it is just a matter of taste which chart you should choose.
Which chart should you use now?
If you still use line charts then you should break now with your habit and change immediately.
Line charts are just unsuitable for the analysis.
Of course, this does not apply without exception , because if you consider a very long time period, then, a line chart is definitely sufficient.
If you should choose bar-chart or candlestick chart is completely your decision.
From an unpracticed eye, often candlesticks are easier to capture than bars. With a little bit of practice you also keep track with a bar chart.