The Binary Options Indicator quite a standard. I do not find in it something unique. It is simple in everything from setting on a live chart to analysis and application.
He appears in the form of a curve in a separate window for a live graph moves up and down relative to the zero mark.
Indicator ROC It shows when the asset is in the zone OverboughtOr, alternatively, in the zone oversold.
Signals The rate of change indicator:
- If the curve is overbought (above $ 0), will probably reverse and change the direction of the asset value.
- If the curve is oversold (below 0), will probably reverse and change the direction of the asset value.
Remember, the larger the numerical value of the indicator, the stronger and longer the reverse movement.
- If you see that the indicator Rate of Change turned in the overbought zone, began to move down and crossed the zero line, it is necessary to open an option PUT.
- If you see that the indicator Rate of Change He turned oversold, began to move up and crossed the zero line, it is necessary to open an option CALL.
It is also still possible to observe the phenomenon of divergence, where the price of the asset continues to rise or fall, and the indicator starts to move in the opposite direction. It is necessary to prepare for the change of direction of the trend.
At the end I would like to add that Indicator ROC It gives good signals in terms of market consolidation. If the trend is pronounced, there may be false signals.
One of the reasons for the growth of popularity, therefore, the technical indicator was the fact that it generates more accurate signals than other analogs. It is easily rebuilt under any timeframes and is capable of producing the same efficiency on any timeframe and trading asset.
Like previous reviews in this section, Rate of Change refers to oscillatory indicators. When its moving begins to grow sharply upwards, then buyers prevail in the market, if downwards, then sellers. Which indicates an uptrend and downtrend, respectively.
Like most other oscillators, Rate of Change generates leading signals, unlike the same trend signals (Moving Average).
To increase the percentage of profitable trades on this technical tool, you need to make the correct setting and follow some tips:
- it is best to set the period from 9 to 13, in this case the number of profitable transactions grows to 70, or even to 80%.
- during short and medium-term trading, traders set a period from 12 to 25.
- if you make a deal while crossing a zero-level MA, then it is better to set a short expiry date - just 2-3 candles.
- if the signal for a deal was a divergence, then it is better to set a longer period. The fact is that in almost all cases, the divergence is successfully worked out, but even experienced professionals find it difficult to determine its beginning and completion of development.
- when working with the 1-minute chart, the most optimal will be to make a deal with the term for the next 5-10 candles.
Among the advantages, it is worth noting the excellent performance in working with the foreign exchange market (divergences are especially clearly practiced). A disadvantage is the excessive flexibility that causes a large number of spurious signals.