Binary Option Technical Indicators
Technical indicators are indications of movement based on price direction and/or volume. Many traders form signals based on indicators and then use these signals to trade their binary options. These indicators are not available at binary option brokers. If you want to use any technical indicators you need to do it at third party stock/forex charting services.
Brokers like Ameritrade via their Think Or Swim trading platform you can use charts with hundreds of technical indicators applied to the chart of, for this example, the EUR/USD.
You will need to grasp the understanding of technical indicators on other platforms then apply that knowledge to your binary option trade.
Best Indicator For Binary Options
A 5 min chart of the asset in question (if available) and look for support and resistance levels. You can use pivot points as well which are common indicators that you can use with other stock trading software.
You can also use realtime charting services of FreeCharts.com to give you an edge.
I’ve laid out my binary option trading strategy before. However, if you don’t want to do research then one could stick with the 5minute chart and use something like the MACD.
Indicators You Can Use On Your 5 Minute Charts
These are a few indicators you can use on your offsite charts to help you increase your success with trading binary options.
So how do you use indicators on another site while you are trading on a binary options broker site?
Its rather easy. You can do it in one browser with two tabs. You can do it with two separate windows.
The MACD indicator happens to be a favorite of mine with a bunch of different settings. I wouldn’t play crossovers for binary options though. Because the time frame is so short, I would play change of trend in the histogram.
As soon as the histogram looks like it peaked or bottomed and starts to swap the other direction, you could try trading off that.
There are many manifestations of RSI and many traders use different settings to determine strength or weakness of trend. With a binary options trade you can see what the strength of the trend is currently as well as seeing extreme oversold or overbought areas. So if your potential trade is extremely overbought you shouldn’t be buying calls there. Vice versa scenario with puts.