Sunday, July 14th, 2013 by James Franklen
Binary options trading platform is constantly improving with the addition of new tools and indicators. Apart from the regular tools and indicators, that we often experience both in Forex and options trading, new inventions have been made to bring more advancement in options trading.
When we talk about binary options trading, we see some custom tools, including MACD, Relative Strength index and stochastic indicator. These indicators also go along with MetaTrader 4 platforms. Therefore, it is advised to be careful about the selection of trade type while using these tools for assessing the assets. Below is the list of some common indicators that can be used along with the trade type suitable for the investors. The careful use of these mentioned binary options indicators results in big profit for the investor.
Binary Options Indicators and Tools
Bollinger Band: Bollinger bands are well known for their effective use in binary options, especially for creating purchasing and selling signals. They help in formulating quality decisions by allowing the trader to compare price movements with the alerts generated by other technical indicators. They function broadly when interconnect with the reliable overbought (or oversold) technical indicator. Bollinger band performs well with most binary options types, including Range option, Touch option and the basic Call/ Put option.
Stockhastic oscillator: Stockhastic oscillator is a technical momentum indicator which compares the security’s closing price with its price range over a period of time. It is used when an assets is caught in a range bound market. It is handy when used along with an overbought or oversold indicator (which is joined with Bollinger band). The indicator has got an excellent standing over the years for indicating the price reversals. The tool is also very affective in finding new entry and exit points, if the price follows a nice pattern. One can achieve the better trading results by installing the stochastic oscillator on trading charts by utilizing the daily time frame or higher.
Relative Strength index: Relative Strength index (RSI) is used to measure the speed and change of price movement. It is one of the basic indicator that new traders find, when they search for technical analysis. Revealing the strength of an ongoing trend makes the indicator perfect for entering positions, specified as trade or no-trade types order.
Parabolic SAR: Parabolic SAR (Parabolic Stop-and-Reverse) is used to find the suitable entry and exit points. Although the indicator picks up the alerts little late but its signals can be improved, if combined properly with other indicators like ADX. The indicator is perfect for those who look for reversal points in the market.
MACD: Moving Average Convergence Divergence (MACD) indicator shows the relationship between two moving averages of prices. The indicator is handy in finding the price divergence. To achieve the best results, the indicator should be used in conjunction with call or put option, with a long expiry time.
Pivot Calculator: Pivot Calculator is widely used to determine alerts for the option’s range (made up of call options, put options, and touch and no touch options.