The indicator for binary options HMA is an analogue of the SMA indicator , but it has a more advanced construction algorithm, which gives even better results when using it.
Hull Moving Average can be used on any market, and even a beginner can trade with it, since this version of the indicator changes the color of the moving average depending on the rise or fall of the price, and also has alerts, thanks to which you can buy options.
Characteristics of the HMA indicator
- Terminal: MetaTrader 4 .
- Time frame: M1-H4.
- Expiration: 5 candles.
- Types of options: Call/Put.
- Indicators: HMA.
- Trading instruments: all currency pairs.
- Trading hours: 9:00-17:00.
- Recommended brokers: Quotex , PocketOption , Binarium .
Installing the Hull Moving Average Indicator in MT4
The indicator is installed as standard in the MetaTrader 4 terminal.
MetaTrader 4 instructions for installing indicators:
The HMA indicator has various settings that allow you to customize both the moving average itself and its visual part:
But it is worth noting that the standard settings are quite accurate and in most cases signal a reversal almost at its very beginning.
But if several Sliding Hala will be used in binary options trading, then the settings should be selected depending on the time frame and instrument.
Trading rules and description of the HMA indicator
Since the HMA indicator for binary options is a trend indicator, before you start trading with it, it is worth knowing what a trend is and how to determine it , as well as how to determine the phases of a trend . And it will be important to understand what a bullish and bearish trend is . Of course, these topics are not mandatory to study, but thanks to their complete understanding, you will be able to achieve much better results in binary options trading.
The algorithm for the moving Hala is to average the standard SMA, using not the moving average period itself, but a special calculation formula. Thanks to this, the moving average becomes more “sensitive” to price changes and gives more accurate results:
And in the image above you can see how the Hull Moving Average and the standard SMA with the same period show completely different values, but at the same time, the Hull Moving Average determines not only small corrections, but also stronger movements, while the SMA lags both during weak and time of strong movements.
Before you start using the HMA indicator, you should learn about its disadvantages, which, unfortunately, it contains. The first disadvantage of the Hull Moving Average indicator is that it can inflate the average price when in fact it is not. Therefore, if you buy options on every signal, then some transactions may not be justified, since the signals will turn out to be false, while others, on the contrary, will be very accurate.
The second disadvantage is that signals after crossing several Moving Averages will often be false, since they do not have the element of delay that is present in standard “moving averages”:
And as you can see, many signals with intersections are false and will bring losses when used in this way.
If we talk about the rules of trading using the HMA indicator, then thanks to the signals built into it, they are elementary, and to buy a Call option you need an arrow pointing up, and for a Put option you need an arrow pointing down.
The indicator is also equipped with alerts that notify the trader when a signal appears:
Examples of trading using the Hull Moving Average indicator
The examples that will be discussed below will help you more accurately understand when it is worth buying options when trading using the Hull Moving Average indicator, since not all signals should be used.
Opening a Call Option
In the image below you can see that the trend is upward, which means it is worth considering only signals for Call options, and after the signal appears, you can buy the option with an expiration of five candles:
And it is also worth paying attention to the fact that after the signal appears, you should definitely wait for the signal candle to close.
Opening a Put option
The situation with downward movement is exactly the same. A signal appears, after which you should wait until the candle closes and buy a Put option with an expiration of five candles:
Conclusion
As you can see, the HMA indicator can generate accurate signals for binary options trading even with standard settings, especially if used with a trend. But in order to get maximum profit from using this indicator, it is worth spending time and choosing settings that suit both the trader’s trading style and the instrument being traded. Also, do not forget that before starting trading on a real account, the correct approach would be to trade on a demo to understand how the indicator works and what to expect from it in the future.
Also, we must not forget about the rules of money management and risk management , since they allow you to make a profit despite unprofitable transactions thanks to competent management. And no less important in trading is a reliable broker, which you can choose from our rating of binary options brokers .
Download the HMA template and indicator
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See also:
Trading Strategies for Binary Options
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