The FX VOLCANO binary options indicator is based on the concept of momentum and strength/weakness of currency pairs, so it is best used on currencies. Initially, the indicator was intended for trading on the Forex market, but its signals can be used without problems for binary options.
It is also worth noting that the FX VOLCANO indicator is paid and is currently sold for $37 on the author’s official portal, but you can download it for free from our website for review.
Characteristics of the indicator for binary options FX VOLCANO
- Terminal: MetaTrader 4 .
- Time frame: M1-D1 (the creator of the indicator recommends using M5).
- Expiration: from 1-10 candles.
- Types of options: Call/Put.
- Indicators: FX VOLCANO.
- Trading instruments: all currency pairs.
- Trading hours: 9:00-17:00.
- Recommended brokers: Quotex , PocketOption , Binarium .
Installing the FX VOLCANO binary options indicator in MT4
Indicators are installed as standard in the MetaTrader 4 terminal.
Instructions for installing indicators in MetaTrader 4:
You can only configure alerts or colors in the main indicator:
In additional indicators, you can also configure only the visual part.
Trading rules and description of the indicator for binary options FX VOLCANO
As mentioned earlier, the indicator is based on strength and weakness, which means that a trend is important for successful trading with it, so it’s a good idea to understand what a trend is and how to determine it . And before moving on to the rules of trading using the FX VOLCANO indicator, it is worth considering additional tools that are used during trading.
The first and most important is the currency strength and weakness panel, which is located in the upper left corner:
This panel shows where the eight major currencies are currently positioned. In addition to the digital display, where the maximum number is 10.0 and the minimum is 1.0, strengths and weaknesses are broken down by color:
- Blue - weak position (downward trend in pairs where the currency is the main one).
- Yellow and orange - neutral position (flat on all pairs based on this currency).
- Red – strong position (upward trend in pairs where the currency is the main one).
And if you look at the chart at the moment, you can see that the EUR currency is now strong:
In the same way, you can determine the situation on any foreign exchange market, regardless of the chart.
In addition to this tool, the panels for switching currency pairs and time frames, which are located in the upper right corner, can also provide a little help:
The currency panel is divided into “major” pairs, “yen” and “minor”.
The trading rules themselves using the FX VOLCANO indicator do not require any experience in trading, as they are based on signals in the form of arrows. And accordingly, to buy Call options you need blue arrows, and to buy Put options you need white arrows:
What you should pay special attention to is the strength of the currency being traded. If at the moment the signal to buy a Call option appears, the currency is in a weak position, it is better to ignore such a signal. The same is true for reverse signals. Currencies that are in neutral positions should also be skipped. As a result, the most correct entry into a trade would be this:
Accordingly, for Call options it is necessary that the currency be in a strong position, and for Put options - in a weak position.
The indicator also has alerts that signal the appearance of new signals:
Examples of trading using the FX VOLCANO binary options indicator
Let's look at examples at what moments it would be possible to make transactions with the maximum chance of a positive outcome.
Opening a Call Option
Please note that until this time the trend was upward (if you scroll back on the chart) and therefore it is worth considering only buying Call options. Also, if the EUR currency was in a strong position at that moment, this would be an additional advantage:
Note: During an uptrend, it is better to refrain from buying put options even though they may bring profit.
Opening a Put option
The situation with Put options in a downtrend is the same. Before this, the trend was downward, and also if the EUR currency was in a weak position, this would be an additional advantage:
Conclusion
It is worth understanding that despite the rules of trading for any indicator, there are always exceptions and in this case, expiration can sometimes be adjusted depending on the strength of the trend, its duration and the trader’s trading style. Therefore, it is always necessary to test trading strategies and indicators on a demo account.
Also, regardless of the profitability of the trading system, proper trading is impossible without applying the rules of money management and risk management , as well as without a reliable broker, which you can choose in our rating of binary options brokers . We wish you successful trading!
Download the FX VOLCANO template and indicator
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See also:
Psychology in trading - what does a beginner need to know?
How to make money on binary options
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