When trading financial instruments, including binary options , it is important to be able to make transactions correctly and accurately, which is not always possible without correctly determining the trend, which can be determined both independently and with the help of binary options trend indicators.
But before using indicators, it is worth understanding the principle of trend trading, since even the most accurate indicator will not be able to bring good profits to those traders who do not understand the current situation on the market.
Content:
- What is a trend in binary options ;
- Tips for determining the trend in binary options ;
- Why is it important to determine the trend in binary options ;
- The best binary options trend indicators ;
- True Trendline indicator ;
- FIJI Trend indicator ;
- Silver Trend indicator ;
- Trend Direction Force Index indicator ;
- Trend Strength Trio indicator ;
- Ozymandias indicator ;
- Trend Focus indicator ;
- Conclusion .
What is a trend in binary options
Before you start using trend indicators for binary options, it is worth understanding the methods of trend analysis, as well as what trends are and how they are formed. Therefore, it will be useful for you to study the following topics on our website:
- How to correctly determine the trend in the market ;
- Identifying and using bearish and bullish trends ;
- How to correctly determine trend phases ;
- How to correctly identify a flat market .
After studying these topics, using trend indicators will be much easier and more profitable, since you will have a basic understanding of how the trend itself works.
If we briefly touch on the topic of trends in binary options, then a trend is always a unidirectional price movement with updating extremes, regardless of the asset or timeframe.
There is also such a thing as trend strength. The strength of the trend can be determined by the binary options timeframe , since the higher the timeframe, the stronger the trend. For example, you can take the M1 chart and the H1 chart of the same currency pair and at the same point in time:
As you can see in the image above, the hourly chart is showing a strong uptrend, as can be seen from the price direction and the updating of extremes (price highs as the trend is up). On M1, the same thing happens, but on the contrary, and you can observe a good strong downward trend, but you should understand that the minute chart can fluctuate in any range and this will not affect large timeframes in any way. Therefore, with a greater degree of probability, the market will still go higher in the future, according to the trend on a higher time frame.
Tips for identifying a trend in binary options
You can determine a trend for different trading styles and approaches. If trading is carried out long-term (on daily charts and above), then in this case fundamental analysis of binary options will play a large role, and trend analysis can only act as an auxiliary tool.
Intraday trading (charts from five minutes to one hour) is much more dependent on the trend, since short-term news only increases volatility and activity in the market, but rarely breaks the current trend. Therefore, if options are bought on an hourly chart, then the trend should be determined on both H1 and D1. To trade on five-minute charts, it will be enough to determine the local trend on M5 and the more global one on H1.
Speaking about scalping on binary options and trading turbo options (most often time frames and expirations from 30 seconds to one minute), the local and global trend will be almost unimportant. In such trading, the signals and indicators used for binary options play a big role.
Why is it important to determine the trend in binary options?
Trending in binary options is important because it allows you to increase the likelihood of a positive outcome during trading for almost any trading style or approach.
A scalper can determine the trend on the minute chart in order to make accurate trades, and a medium-term trader determines the global trend on the hourly and daily charts, which makes it possible to ignore corrections and not make unnecessary losing trades.
It is also worth noting the profitability of most binary options strategies , which are often considered unprofitable, but the whole secret of these strategies is almost always hidden in trend trading.
For example, you can use the strategy for binary options Binary Option System , which has different rules for trading, but one of the options is to make trades with the trend, and in the image below you can see a clear upward trend, in which most of the trades with the trend would bring profit, whereas almost all trades against the trend would bring a loss:
There are still many strategies and indicators that bring only losses against the trend, but according to the trend, most of the transactions (approximately 70-80%) will bring profit, which means that all that needs to be done is to exclude trading against the trend.
So that the trend and its direction can be determined as accurately as possible, auxiliary tools are used, such as trend lines or other graphical tools, but the most popular way among beginners is to use trend indicators for binary options , since they are much easier to use and visually display all price changes.
Best Binary Options Trend Indicators
It’s worth noting right away that there are quite effective standard trend indicators that are present in the MetaTrader 4 terminal . The most popular are Bollinger Bands, Parabolic SAR and Moving Averages . But there are also proprietary trend indicators that were created specifically for determining the trend of binary options and trading on it. Next, let's look at the TOP 7 best trend indicators for binary options.
True Trendline indicator
The True Trendline indicator is a simple indicator of trend lines that are built automatically regardless of the time range, so when switching time frames, the lines will not change and you can see the true trend:
The indicator also contains various settings that allow you to:
- Enable or disable auto construction;
- Enable or disable quick analysis on M1 and M5;
- Adjust colors and line thickness.
And in addition to this, the archive will contain two versions of the indicator, one of which has built-in alerts that allow you to track the price touching the trend line, which is a signal to buy an option to rebound from it.
The True Trendline indicator will be very useful for beginners who want to learn how to build trend lines correctly, since very often there is a temptation to add a lot of different lines, which will only confuse and lead to unprofitable trades.
Download the True Trendline indicator
FIJI Trend indicator
Another trend indicator from the TOP7, with built-in signals in the form of arrows that tell you when the direction of movement changes.
The indicator can be used both for short-term trends and for global trends, since it is based on the Moving Averages algorithm. Therefore, by changing the settings you can achieve different readings, but for maximum efficiency it will be necessary to spend time selecting the settings. If you use standard settings, you will be able to see all short-term changes:
In addition to everything, the indicator has built-in alerts that notify the trader about a change in direction and the appearance of arrows.
Note: you should not rely heavily on this trend indicator alone, since it shows the best results only together with other indicators.
Download FIJI Trend indicator
Silver Trend indicator
It makes sense to use the indicator on a pure chart with colorless candles or with a line chart, since it colors the bars in trend areas of the price.
The advantage of the indicator is that it accurately shows both the trend itself and corrections that can always occur during a strong movement:
The indicator has few settings, but if you spend time selecting them, you can achieve a very accurate display of the trend on any market and time frame.
Download the Silver Trend indicator
Trend Direction Force Index indicator
This trend indicator is perfect for medium-term forecasting, since even if the settings are changed, it does not become much more sensitive to price fluctuations. Therefore, those traders who trade on hourly charts can effectively use this indicator in binary options trading.
Therefore, if the indicator shows changes in the trend, then only when they were significant, and at all other times the indicator line will be near the zero level:
Download the Trend Direction Force Index indicator
Trend Strength Trio Indicator
An indicator consisting of three lines that almost never intersect each other (and therefore are unlikely to be based on moving averages) and show a local change in trend:
What’s convenient about this indicator is that, among other things, it can be used to track divergences, which can also indicate changes in the trend. This makes the indicator universal for binary options trading, since it will not only help you determine the trend, but also see when you can enter a trade.
Download the Trend Strength Trio indicator
Ozymandias indicator
The Ozymandias binary options indicator is a prominent representative of trend indicators, as it allows you to see both local trends (if the default indicator parameters are used) and global ones (if you increase the variable in the settings):
The indicator is also extremely easy to use and will be especially understandable to beginners, since the settings have only one parameter that can be changed, which ultimately gives not only the price direction, but also points for buying options.
Download the Ozymandias indicator
Trend Focus indicator
The TOP 7 indicator for binary options, the Trend Focus indicator, closes the TOP 7 rating. The indicator visually resembles the Moving Average, but works according to a different algorithm, since in addition it has signals that indicate a trend reversal:
In the settings of the Trend Focus indicator, you can change both the period for drawing the line and configure alerts, which are also present in this indicator. The lower the period set in the settings, the more sensitive the indicator will be to price movements and the more signals will appear.
Download the Trend Focus indicator
Conclusion
As you can see, there are both standard binary options trend indicators and TOP proprietary ones. Of course, standard trend indicators are no less effective in binary options trading, but if you combine them with new proprietary indicators, you can get a powerful tool for determining the trend in any market. And by supplementing everything with general knowledge obtained from articles about the trend, it will be possible in 90% of cases to accurately determine the future direction of the price.
Beginners should also remember that any binary options trend indicators should be tested on a demo account in order to understand all the details of their work and choose for themselves the one that will best suit their trading approach.
Regardless of how experienced a trader is, when trading binary options you should always adhere to the rules of money management and risk management , and trade only through a trusted broker, which can be found in our rating of binary options brokers .
Can't figure out how this strategy or indicator works? Write about it in the comments to this article, and also subscribe to our YouTube channel WinOptionSignals , where we will definitely answer all your questions in the video.
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