Technical indicators that work in binary options trading, can dramatically improve the opportunity for success as a trader. An integral aspect, to enhance winning, is to have a system that utilizes indicators from three main categories, which signal the optimal time to enter a trade with a trader’s confirmation of market movement.
In this article, I will articulate the three main categories of indicators, that when utilized in combination, a trader can gain the upper hand and improve the opportunity of winning a trade.
The first category of indicators that a binary options trader may utilize, in order to assist in analyzing the markets, are momentum indicators. An example of indicators in this category include those that measure “relative strength of a trend” (RSI) or a “moving average convergence/divergence” indicator (MACD) that may reveal the change in market momentum. The changes in momentum analyzed by the MACD indicator may include direction, duration and strength which all encompass momentum of a moving market.
The second category of technical indicators are comprised of trend indicators. An example of trend indicators may include “Moving Averages” (MA) which may indicate support and resistance levels, “Bollinger Bands” (BB) which measure a moving average of highs and lows based on previous trades and “Parabolic SAR” (Stop and Reverse) indicators. These type of indicators measure potential market trends as they develop and can assist the trader in analyzing the optimal time to enter a trade.
The third category of technical indicators are volatility indicators. An example of volatility indicators include “Standard Deviation” (SD), which measures and quantifies variations in market movement at a set value, or the “Keltner Channel” which measures market flow through moving averages and channel lines that are set at a certain value range above and below the moving averages (MA). These type of volatility indicators provide important value to range trading in response to market highs and lows. level indicator
There are many other indicators that can assist the trader in analyzing market conditions in the three main categories of momentum, trend and volatility. Some of the indicators mentioned above such as MA’s and BB’s may also crossover or overlap in another category. The important aspect of utilizing indicators is having a combination that strikes the categories of momentum, trend and volatility in order to analyze the best markets condition that optimize a trader’s opportunity for profit.
In optimizing the opportunity for profit, the trader may also utilize a customized set of indicators that alerts the trader on when certain market conditions have been analyzed, and signals when a combination of set parameters have been met. These type of custom indicators can be the best alerts for the trader to analyze and confirm market conditions before entering a trade.