Sunday, March 16th, 2014 by Tim Lanoue
In a booming industry such as binary options it is almost impossible for new traders not to try to make a splash in the industry and strive for financial freedom. Becoming financially independent is one of our most desirable dreams or desires in our lifetime and trading binary online with binary options may just be the gateway for you to be able to achieve it. The purpose of today’s article is to bring you guys one step closer to financial freedom by providing you with an article that covers the basics of the Wilder’s RSI indicator and how to properly apply it into a binary options trading strategy.
The Wilder’s RSI indicator is classified as a momentum indicator that compares the summation of an assets magnitude losses and gains. The main function of the Wilder’s RSI indicator is to determine whether or not the asset you are watching is oversold or overbought. Being able to dictate the market condition of our targeted asset is essential when determining which type of trade we plan to enter when trading our asset.
Setting up the RSI indicator is relatively simple and requires only the completion of two steps. However, I have noticed that many people tend to lack the set up part in their binary options trading strategy so I will re-emphasis this, do not skip the set up phase when using this indicator in a binary options trading strategy. The first step we want to make sure is that the asset we are watching displays a low level of volatility, meaning that the asset reflects characteristics where it is less prone to change directions in a short amount of time due to minor market conditions. Common assets that display this low level of volatility that we are looking for would be the EUR/USD, USD/CHF and Gold. The last thing we want to make sure is that the time frame that we are watching our asset is no less than 15 minutes and no longer than 30 minutes, any time frames outside this point affect the accuracy of the trading signals generated.
Now that we have the right set up we can look more towards the strategy portion when using this indicator. As you can see in the picture below we have six trading entries that were placed. In order for us to place any put trades we need to make sure that our Wilder’s RSI white line crosses downward through the RSI Wilder’s blue line and it has to be above the level 50.00 as indicated on the side of the oscillator. However, in order for us to place a call trade we need to make sure our Wilder’s RSI white line crosses upward through the RSI Wilder’s blue line and is below the level 48.00. If all those terms are met then we can go ahead and place those designated trades however if it is not at the right level then do not place those trades.
Trading binary options can be your gateway to financial freedom allowing you do things that you never thought possible. All it takes is dedication, luck and experience to thrive in the industry so why not take your chances and change your life in this industry. Setting up an indicator properly in any binary options strategy is always the most important step so make sure you don’t cut any corners there. If you have any questions or comments please feel free to leave them below. As always stay tuned for more articles to come!