Know More About The Binary Options Indicators -

Know More About The Binary Options Indicators

Binary Options Indicators are an indispensable weapon of any good binary options trader’s arsenal. If you are using Binary Options tools then you are at a greater advantage to those who trade largely based upon their feel of the underlying asset. While these traders may be right, they’re not using one of the most effective tools that are available to an options trader. Indicators are available for all types of traders, and a binary option trading is no different. In fact indicators are even more effective in case of binary options, because in binary options, you need only a minuscule amount of change in the indicator to make a profit. While trading binary options, traders generally make money by predicting the direction of the market. Trading binary options involve trading several underlying assets and making profits based on the price direction. These underlying assets may be currencies, stock indices and commodities.

Binary Options Indicators Types And Uses

  • Binary vs Forex indicators: The binary options platforms are mostly web based and do not include the conventional indicators like the Forex platforms. However the same indicators that are used in Forex trading can be modified to be used in the binary options market by converting them into binary options indicators. Traders can also make their own custom-made indicators mainly for analyzing the MT4 charts.
  • The conventional or default indicators: These include indicators like the MACD indicator, Stochs oscillator, RSI etc. All these indicators are used in different ways and function differently. When you want to use them for binary trading, you have to adapt them according to the underlying trade type that you have in mind. A list of binary options indicators is given below along with the trade type they are generally used for :-
    • Pin Bar indicator: This is a pure price action indicator that is generally used by newbies. Also called Pinocchio bars, this indicator acts as a form of reversal candle and demonstrates an area of support or resistance based on price action.
    • MACD: You can use this indicator if you are trying to detect price divergence. This generally works well with call/put options with extended expiry dates or times.
    • RSI : The relative strength indicator or RSI is the price pattern and speed indicator.
    • Bollinger Bands : This is a volatility indicator invented by John Bollinger in the early 1980s. This indicator measures the ‘highness’ and ‘lowness’ of the price compared to previous trades.
    • Stochastic oscillator: This is a momentum indicator that is used mainly while trading securities. This indicator tries to envisage the price turning points by evaluating the closing price of a security to its price range.
    • Value Charts : This indicator signifies overbought or oversold positions. It indicates the point a market is at an extreme level and is likely to turn around.
    • Custom indicators : Many Forex traders are adding commodities like gold and silver from other markets. This is why traders formulate custom indicators for detecting trading signals while trading binary options. Custom indicators may be formulated by programmers and can be bought by traders from the internet.

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