Tuesday, February 4th, 2014 by Tim Lanoue
The TSF indicator, otherwise known as the ‘Time Series Forecast indicator’ is a technical analysis tool that focuses on linear regression trends that acts as a moving average indicator. One of the main purposes of the TSF indicator is to predict future price levels of assets which can be a beneficial tool when trading online with binary options. Coming across a reliable indicator to implement is sometimes a struggle with binary options in today’s market which is why the focus of today’s article is to provide you with the information needed to properly understand and implement the TSF indicator in a trading strategy.
The Time Series Forecast was originally designed to predict future price levels while displaying the look of a moving average. In the picture below you can get an idea of how this indicator looks when applied to a charting solution. Perhaps one of the best advantages about this indicator is that it can be applied with other binary option strategies due to its innate ability to spot potential tops, bottoms, and reversals. Meaning that this indicator is great if you are using the double top/bottom binary options strategy or trade reversals when trend trading. Moving forward, when the price of the asset is above the indicator it signifies to us that there is a strong bullish market but when prices are below the TSF line it tells us that the market is bearish.
Setting up this indicator is rather simple and only requires the use of a charting solution. There are a couple of guidelines that need to be followed when setting up this indicator to use as a binary options trading strategy. The first would be to make sure we have our charting system set on a time frame consisting of 15 minutes, this is the optimal time frame when using this strategy and the use of other time frames will affect the accuracy of the signals generated. The last guideline we want to follow is that we are using a reliable trading asset like the EUR/USD, Apple, USD/CAD or USD/CHF. After our guidelines have been set in place then we can move forward to the tactical portion of strategy. When it comes to placing a trade we need to wait for either two occurrences to take place. The two different things that can occur would be a double top or bottom either involving the bodies of our candles or the wicks of our candles. As long as we have a double top or bottom with our candle body or wicks then we are good to place a trade in the direction that our TSF line is heading. So if the line is heading downward then we place a put trade but if it is going upward we place a call trade. In the picture below you can see an example of this strategy in action.
Having a great technical analysis tool like the TSF indicator is extremely beneficial when trading online with binary options. Not only is this a strong strategy but if you use it in combination with other indicators and binary options strategy then the power of the signals generated are even more in your favor. If you have any questions please feel free to leave a comment below.