When you are trading in binary options, the best indicator for binary options trading can give you the edge you need. Indicators give you a way of synthesizing market and trend information in a quick and accessible format.
The best indicators for binary options trading
Binary options trading involves putting your investment and financial markets know-how to work. Still, even the savviest of investors with a good research base values a little help along the way. The key to successful binary options trading is knowing just the right moment to place your put or call trade. A binary options indicator – sometimes also called a technical indicator or indicator tool – is a tool to help you make that decision.
Types of binary options indicators
There are many such tools on the market available for investors but how do you find the best indicators for binary options trading? There are different types, but they all have one goal: to increase the level of accuracy in trend forecasting.
By analyzing various key factors and movements within an industry or the financial markets as a whole, indicators help you make better investment decisions. Here is a brief look at different types of indicators.
Binary options trading trend indicators
These, as the name suggests, chart market trends. The Moving Average indicator, for example, is the most popular and simplest of all binary options trading indicators, which is highly recommended to newbies. The Moving Average indicator records the average closing price of an asset over a given number of time periods. Experienced traders often look at two or more MA indicators, looking for a crossover that indicates an upward or downward trend.
Simple Moving Average Indicator
Binary options trading trend confirmation indicators
These can both confirm an existing trend as well as gauge the health or strength of the trend. The Moving Average Convergence Divergence or MACD measures the difference between two moving averages and can be a good indicator of future price directions. Trader use it for buying Call and Put Options while the trend is moving strongly, when closing their positions before the end of the trend. The MACD indicator is mostly used when trading with 60 seconds options, but you must use it in synchronicity with resistance and support lines.
Moving Average Convergence Divergence (MACD)
Binary options trading overbought and oversold indicators
These can help investors decide at what point an asset has been overbought or oversold and therefore its price is likely to change directions. The Relative Strength Indicator or RSI is one of the most popular of these. The RSI generates a score – more than 70 indicates traders that the underlying asset is overbought and less than 30 indicates traders that the underlying asset is oversold. When the RSI value is less than 40 it indicates a bear market and if it’s higher than 60, it indicates a bull market.
Relative Strength Indicator or RSI
Binary option brokers trading platforms with built in indicator tools
Many binary options brokers like OptionBit, offer their own set of binary options indicators. They may use the basic types of indicators discussed or variations using other technical data to give you a head’s up on binary options opportunities.
Many binary options brokers such as EZTrader, also offer convenient features such as automatic notifications on mobile technology, so you can take advantage of opportunities whenever they arise. Be sure to ask for detailed information on how they work and also an indication of the results that have been achieved.
From that point on, it’s up to you. Happy investing!