The AMA binary options indicator is one of the latest tools developed by the famous financial expert Perry Kaufman. Its full name is Adaptive Moving Average, which means Adaptive Moving Average. Without exaggeration, this technical analysis tool has become a real breakthrough in price analysis in financial markets.
For the first time, traders around the world started talking about this tool after the publication of Kaufman’s book “Smarter Trading”. In it, the author shared with readers the idea of an adaptive moving average, which has minimal lag compared to the classic moving average. This feature allows AMA to very accurately determine the trend in the market and respond to signals about its stop ( flat ) or reversal, which significantly reduces risk and increases trading efficiency.
In this review, we will look at the principle of operation of the Adaptive Moving Average and its signals, thanks to which even an absolute beginner can hope for success in the Forex market or in binary options trading. You can download the AMA from our website for evaluation purposes absolutely free.
Content:
- Characteristics
- Installation
- Overview and Settings
- AMA Trading Rules
- Buying a Call Option
- Buying a Put option
- Conclusion
- Download AMA
Characteristics of the indicator for binary options AMA
- Terminal: MetaTrader 4
- Timeframe: M15
- Expiration: 3 candles
- Option types: Call/Put
- Indicators: AMA.ex4
- Trading instruments: currency pairs , commodities, cryptocurrencies , stocks
- Trading hours: active market hours
- Recommended brokers: Quotex , Pocket Option , Deriv , Binarium
Installing the AMA binary options indicator
The AMA indicator is installed as standard in the MetaTrader 4 platform. To do this, you need to add it to the root folder of the terminal by selecting “File” in MT4 and then “Open data directory”. In the directory that opens, you need to go to the “MQL4” folder and then to “Indicators”, and then move all the files there. Templates are installed in exactly the same way, but are placed in the “templates” folder. For more detailed installation instructions, see our video:
Overview and Settings of the AMA Indicator for Binary Options
The AMA binary options indicator was created taking into account two key aspects that traders face when using various price series smoothing algorithms. First, it is not sensitive to noise in price data. This eliminates the appearance of false signals about a change in trend due to increased volatility . This circumstance alone significantly increases the accuracy of analysis and decision-making.
Secondly, the adaptive moving average is characterized by a minimal lag, which allows you to quickly determine the trend and respond to signals about its fading or reversal. This further reduces risks and increases the efficiency of trading in financial markets.
The indicator itself is displayed on the main chart of the trading platform as a two-color moving average. Green indicates upward price momentum, and orange indicates downward price momentum. The signal to complete a transaction is a color change. At the same time, we especially emphasize that this moving average does not redraw its signals, and they can be trusted.
The AMA binary options indicator has only a few parameters that can be changed in accordance with your objectives and the characteristics of the currency pair or cryptocurrency being traded. Feel free to experiment with the settings and share your values for different financial instruments in the comments.
The indicator has only 4 parameters:
- Period – number of candles used for calculation;
- Fast end period, Slow end period – sensitivity coefficients;
- Price – price (Open, High, Low, Close) at which the indicator is calculated.
The “Fast End Period” parameter has a great influence on the frequency of adaptive moving average signals. The higher the value, the less frequently it signals a trend change. This makes it easy to adapt to your trading style. If you are a fan of turbo options and scalping, we recommend choosing “Fast End Period” in the range from 2 to 5. In case you prefer swing trading and binary options trading with longer expiration periods, set this parameter to a value of 7 or higher .
In addition to the calculation parameters, you can change the appearance settings by choosing the colors you like for display.
Trading rules using the AMA binary options indicator
The AMA binary options indicator works correctly on any symbol (no matter how exotic it may be) and on any time frame. But most importantly, it is compatible with trend trading - an approach based on the idea that prices tend to move in a certain direction over a period of time.
In order to better understand the rules of trend trading, we recommend that you familiarize yourself with a selection of articles specifically devoted to this topic:
- How does a trend work in markets?
- Identifying and using bullish and bearish trends.
- Market phase changes .
- How to determine a flat in the market?
To make trades using AMA signals for binary options, you do not need any additional tools. Everything you need for trading is already included in the indicator. According to the developers, a change in the color of the moving average signals a change in the trend of a financial instrument, and it is enough to make transactions during active market hours, when there is volatility .
In addition, it is assumed that positions will be opened when the position of the closing prices of candles (Close) changes relative to the adaptive moving average (if closing prices move above the AMA - open a Call, below - open a Put) and change its color, but to increase the percentage of profitable transactions, we add Another similar indicator and condition is that at the time of the transaction, the color of the short-term AMA must match the color of the long-term one (with a longer period of the “Fast End Period” parameter).
In this case, the trading rules using the AMA binary options indicator for Call will be as follows:
- We make sure that there is an upward trend. Long-term adaptive moving average with “Fast End Period”=100 green;
- The color of the short-term moving average with “Fast End Period”= 5 changed from red to green;
- When a candle opens, buy Call.
Trading rules for Put:
- We make sure that there is a downward trend. Long-term adaptive moving average with “Fast End Period”=100 in red;
- The color of the short-term moving average with “Fast End Period”= 5 changed from green to red;
- When a new candle opens, buy Put.
Recommended expiration time is 3 candles. However, for a specific instrument, the position holding period should be selected based on the results of backtesting and the time frame used.
Buying a Call Option
- We make sure that there is an upward trend. Long-term moving average is green.
- The color of the short-term moving average changed from red to green.
- The previous candle closed above the moving average.
- At the opening of a new candle, buy Call.
Buying a Put option
- We make sure that there is a downward trend. Long-term moving average is red.
- The color of the short-term moving average changed from green to red.
- The previous candle closed below the moving average.
- At the opening of a new candle, buy Put.
Conclusion
However, we remind you of the importance of maintaining realistic expectations. Like many other technical analysis tools, the adaptive moving average does not guarantee accurate signals in all cases. It is important to understand that it can sometimes give false signals, especially in volatile market conditions. The effectiveness of this indicator will greatly depend on the current market situation. However, we recommend that traders do not hesitate to use the AMA binary options indicator in developing their own strategies, taking into account its potential and possible disadvantages.
General recommendation - try to avoid price consolidations and flat areas of the market. Start with a demo account with a trusted broker , applying all the rules of risk management and money management . And only after receiving a positive result on virtual money, proceed to trading on a real account. We wish everyone a favorable trend!
Download binary options indicator AMA
See also:
Current bonuses and promotional codes for BO
To leave a comment, you must register or log in to your account.