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.
1 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.
2 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.
3 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.
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.
There is no magic formula for the trader,
for experiencing a high winning percentage of trades. The diligence in
properly utilizing indicators, in combination with analyzing and
confirming market conditions, is the formula that best enhances the
trader's opportunity for success and earning profit from trading.
A
customized set of these technical indicators, that work together to
signal the trader monitoring the market, can dramatically enhance the
opportunity for a winning trade and earning consistent profit.
Developing a reliable trading system that signals the trader can be a
complex task that is best suited for experienced market traders that
understand price action. The complexities of a system can be made by an
experienced developer and can be simple to use. A system developer that
understands market dynamics will be able to create a system that takes
into consideration indicators from the three main categories. For the
trader, utilizing a customized trading system can make trading as simple
as listening to audio and looking at visual alerts that confirm the
best opportunity for a winning trade.
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