Binary options MACD
The difficulty of making a profit on binary options is related to the fact that looking at an empty quotes chart it is difficult to predict the direction of the future price movement of an asset. That's why most experienced traders trade using technical indicators. What to do for beginners? For them, we have prepared a simple binary options strategy - "MACD Binary Options".
Binary options MACD
So, for the uninitiated, let's explain. Technical indicatorsThe technical indicators are indicators that are built into the options trading platform and are tasked with analyzing the asset's quotes and determining their future movement dynamics. Using technical indicators in trading, traders can significantly increase the profit factor of their trading. Thus, making it a profitable activity.
Advantage technical analysis You can use different indicators and trading systems in order to understand the market sentiment as accurately as possible. Of course, you begin to understand the necessity of technical analysis of the market, you study the instruments and read special literature. We would like to present you one of the most popular classical indicators used by traders. MACD (Moving Average Convergence Divergence).
The MACD is a trend indicator, showing current market trends (these are both long-term and short-term sentiment). It is able to signal the change of short-term trends to long-term trends, overbought/oversold, convergence/divergence. The MACD will allow to make effective transactions, and false signals, unlike the standard MA, the system generates much less. As an effective oscillator, it will help to know in which direction the price line will move, its strength, the possibility of reversals.
Signals MACD is recommended both by professionals and beginners. The peculiarity of the tool is that the information is generated by moving averages with different indicators of periods (9, 12 and 24 are standard parameters), which allows the indicator to take a positive value when the price of an asset is growing and a negative one when it is falling.
The MACD consists of three components:
- MACD line (for it, the indicator of the long moving average (period: 12) is subtracted from the short EMA (period: 24),
- The signal line (period settings - 9) shows favorable moments for buying or selling options,
- Histogram (shows the distance between the MACD and its signal line; when it is above the nought line, the value goes up, if it is below it, the value goes down).
Buy and sell if the MACD has crossed the signal line from below or above:
- If the crossing occurs from bottom to top, it is worth buying KOLL options (upward trend);
- If the crossing is top-down, it is worth buying PUT options (downtrend).
Divergence and convergence allow you to identify the weakness of current trends and their imminent change, which is recommended to confirm with additional tools:
- If a divergence (a bullish divergence, the price maximum is not confirmed by the indicator readings), which indicates an imminent market reversal, you should get ready to purchase an option COLL;
- At convergence (bearish divergence, when the lows of the price line are not confirmed by the indicator data), which will also signal the imminent reversal of the market, you should get ready to buy PUT options.
It is worth remembering that by increasing the period setting, you will get fewer signals, but most of them will be accurate, if you reduce them, the signals will be more, but many of them will be false. The MACD is ideal when the trend is strong, which is why it is often used in trading techniques, most often used to find reversal points in the market, as well as overbought and oversold conditions.
Here is a simple example of the profitable use of indicators in option trading. And, for example, let's take the MACD indicator, which is included in some technically advanced trading terminals:
As you can see the MACD indicator, which is located in a separate lower window of the platform BinariumIt indicates the future direction of quotations accurately enough. This means that by entering into transactions based on its signals, you can significantly improve your trading statistics of profitability.
MACD strategy for binary options
How to Use the MACD in Binary Options Trading? The MACD indicator gives the trader two types of signals at once:
Signal No. 1 - crossing the lines of the indicator with each other:
- Crossing the lines upwards is a signal to make a deal upwards:
- Crossing the lines downwards is a signal to make a deal downwards:
Signal #2. In addition to the above signals, the MACD binary options signal for transactions when the signal line crosses the zero level of the indicator.
- MACD zero line crossing upwards is a signal for an up deal:
- MACD zero line crossing downwards is a signal to trade DOWN:
And if you're looking for an answer to the question - "how to make money on binary options for a beginner?", then MACD binary options are the best option for a quick and effective start!
Thus, a simple binary options strategy - "Binary options MACD" allows you to close in profit not less than 65% concluding transactions, and this, as we know, the percentage at which the trading account will grow.
Remember that the maximum amount of risk that can be taken in 1 transaction is 2% of the account amount. Such caution will allow you to sit out any trading drawdowns, and your trading account will grow in the course of trading on the specified system. For example, at Binarium (visit the site), whose platform was used for testing and writing this trading system, the minimum amount of transactions is 1 USD. Thus, to trade the minimum amount of transactions, you will have to deposit only 50 USD!
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