Indicators and how to use them in binary options are done by many traders. When you start building your plan for a quick profit, it’s always best to have a strategy and never go for it. Something that can work for one trader and not work for another. Like anything else, you have to practice, put on hours and learn that you want to be a successful trader. There are two indicators that are popular among many for any new or experienced trader.
1. CCI – Commodity Channel Index
This indicator is good for support when deciding on trading. Comes with +100 and -100 levels. The market is about 80% of the time at these levels and 20-25% of these levels. For example, if you see the market rise above the +100 level, this is a good indicator for a long trade with a strong trend. If the market reverses and wants to cross the -100 level, this is a good sign for a downtrend and short trading.
2. MACD – Variable Average Approximation / Breakdown
This indicator shows the strength, direction, momentum and duration of a trend in stock prices. As an acceleration indicator, it shows the relationship between the two moving averages. By default, this is defined as a 12-day exponential moving average, a negative 26-day exponential moving average, and a line signal as a 9-day EMA. Then you have a histogram that makes the change between the MACD line and the signal line. Typically, when using this indicator, you are looking for lines that will cross each one to trade. Be careful, because this is not generally true. An experienced trader will generally look for a tool in the market to trade and get confirmation from another indicator before trading begins.
Using these two indicators together often helps traders make good decisions on entries when placing trades. Like everything, the practice is perfect. When trading, give yourself time and patience. With many traders, the concern is to manage your emotions. Sometimes, after an injury, you rely on your desire to get it back quickly and recover your damage. This usually results in losing more than you expected, and now your emotions are extremely high.
Indicators and how to use them in binary options is another tool when many traders decide to open market. Keep learning every day. Think of yourself as a successful trader and never give up.