Convergence of indicators in binary options -

Convergence of indicators in binary options

There are many strategies that are used in stock trading. Each of them has their own reason for being used over the others. The benefits are usually shown by the percentage gain with enough tested data to support them. However, the individual indicators are never good enough when used alone as a trading strategy. The best way to judge the market performance would be through the use of convergence of indicators. This is achieved when the technical indicators show that the market forces have formed one pattern.

Using a Convergence of Indicators

In order to be able to use the convergence of indicators, it is important to begin by understanding the bullish and the bearish signals. The bullish momentum increases over months or weeks and decreases in the bear markets. The bear market shows a sharper curve than the bull markets. In order to be able to analyze the long-term trends and markets, it is advisable to use a long-term chart showing the weekly closing prices. Using moving averages, trend lines, momentum indicators and other technical analysis tools enable the trader to identify the potential support or resistance of the market.

The next step should be moving down to the charts showing the daily closing prices. These charts are usually very useful for the binary traders as they offer the sell and buy signals for the weekly or monthly expirations which highly depend on the market trend or the resistance or support proximity. The trader should begin by identifying the medium-term trend followed by either waiting for a seller or buy signal which converges with the long-term trend to develop or even identifying the current long-term signal and moving down to the shorter time-frame for convergence. The sell or buy signals should converge in the medium-term or long-term. Where there is a bullish trend in the midterm one should wait for similar trend in the long-term.

The convergence of indicators has both the positive and negative points. They tend to be good for their support the price movements in a way that could not be supported by single indicators; they add volume to the markets and even enhance the movement in prices. On the other hand, it is usually very difficult to come across convergence with the current economic hard times.

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