Binary Options Indicators
Trading, with all its obvious advantages, is still a complicated job, which comes down to tracking the asset dynamics and a profitable entry into trading to make a profit. By carefully studying the market condition, using a huge set of data, the traders use all possible tools – brokers signals, reviews, forecasts, strategies, including various indicators. Indicators are sometimes the first thing a market newcomer gets to know, the first source where he/she takes his/her first signals. Professionals, having traveled a long journey of trading binary options, have an entire arsenal of such indicators that can generate signals depending on the market situation, such as an asset, expiration, etc. What are these «indicators»? Let’s talk about it today.
- 1. When did the indicators appear?
- 2. Indicator types
- 3. What are «binary options indicators»?
- 4. How is a deal formed in the binary options market?
- 5. How is a Forex deal formed?
- 6. Platforms with indicators for binary options
- 7. In which way are indicators used in the broker’s terminal?
- 8. What should you do if the platform does not have a correct indicator?
- 9. How should you add an indicator to the MetaTrader 5 chart?
- 10. How to receive signals for trading based on indicators?
- 11. Binary options indicators
- 12. Reviews
Indicators shall mean the instruments that make automatically the calculations according to a formula using the graph indicators and user settings and produce results on it. These instruments are technical analysis tools, they are usually represented as graphical construction: histograms, lines, etc., which are immediately added to the chart when selected in the list of terminal indicators. Indicators do not operate simply and thoughtlessly, they are based on serious formulas; or shall we say, they are even real smart machines that simplify the trader’s work and automatically perform complex calculations and constructions. Today, you should just add an indicator to the chart for receiving signals and that’s about it – the trader is ready to work. Indicators are certainly especially attractive for traders due to such automatism, instant access to data on the chart and convenience.
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When did the indicators appear?
Indicators could not come out of thin air, these technical analysis tools became a result of the hard work of financiers, analysts, traders, who worked much more to get the market entry signals than is happening today. Trading on the market existed long before the advent of computers. In these times, before determining the asset dynamics, the traders made by themselves the calculations of a large amount of data, kept records, trading statistics on instruments, and constructed graphs and tables «by hand».
Then a fast-moving computer era began and it turned out that the most complex calculations, which took a lot of time, could be entrusted to the machine and it would provide the result quickly and accurately. Further, the spread of the World Wide Web result in unique and grandiose consequences – now, sitting at home at the computer, the trader has access to a database of indicators, for example, to those available in the terminal, he/she can literally add them to the chart with one click, combine several indicators and draw conclusions about the assets dynamics already based on them.
Moreover, some terminals enable you to add indicators and entire trading systems to their libraries, which, in particular, include the Web authority tools; and their number increases due to powerful development of the Internet. Traders join the communities all over the world where market professionals themselves develop indicators and share the work results with concerned subscribers, and they have much more opportunities than before. It’s simple and easy to track the emergence of new indicators thanks to the Internet; they can be downloaded from the author and installed on your platform. And nowadays the indicators tell traders the likely price dynamics while processing huge volumes of data in a matter of seconds.
Traders currently mostly rely on indicators, although some of them use the fundamental analysis data more in their work, and they criticize indicators. But it’s worthwhile to understand that an indicator is still not an ideal tool, because it may be late with signals, it does not predict the exact future of an asset, but only predicts the possible asset dynamics based on historical data of price and volume. Moreover, it is possible and even recommended to trade in the market using different instruments, depending on a trading style and on an instrument type.
All analysts, forecasters, and trading gurus currently use indicators. Starting the first steps in the market, the players get acquainted with the simplest technical analysis tools that are more accessible and understandable to them. But both beginners and professionals often rightly ask themselves the question: which indicator is better, which should be used for a specific situation? Let’s talk about this later.
A large number of technical indicators are currently available on the Internet – over 2,000 free tools only in the MetaTrader 5 system, which contains several options for finding and adding them at once (Internet, library, market, ordering an individual script). New tools appear daily in the community. The «live chart» library also offers thousands of different tools, both copyrighted and popular ones. How many indicators are there on the market right now? It is a difficult question, there are really a lot of them, but traders should understand that this is not the main thing here, but that they should determine a list of tools being convenient and effective for themselves that can be used in different situations and receive income.
Effectiveness of such tools is estimated differently by analysts. It is worthwhile to understand that there is no universal indicator on the market that will help a trader in any situation, therefore there should always be a set of indicators in their arsenal. There are classic, basic indicators known by all players – popular tools that are sometimes called «people’s» ones: for example, MACD, Bollinger Bands, Stochastic Oscillator, RSI, etc.
Thanks to the «people’s» rating, it is easy to understand to which extent a particular indicator is widespread among traders, which tools they trust the most, and which one, in their opinion, is the most accurate in their forecasts. There are also more sophisticated tools used mostly by the professionals, which require more knowledge and skills to work with. Some indicators are easy to find on the Internet, they are free to use, while others, on the contrary, are less common among players, because you should pay money and not always small amounts to install them. It is important for traders to understand that there is a classification of indicators, thanks to which it is easy to see their features. Thus, indicators can be divided into the following groups:
- Trend indicators
They are able to determine a trend direction at a given moment and notice its reversal in time. Such tools line up on the chart parallel to the price; they can intersect with it and change their position, signalling a trend change. They are used to determine the trend – a signal about opening a deal in a specific direction to enter the market and exit it in time. When the price reverses, changing a direction, the trader closes a position, managing to prevent possible losses. These are, for example, Moving Average, ADX, MACD etc.
- Oscillating Indicators
These tools are the second popular group of technical indicators, which are also common among traders. When they are added to the chart, they are displayed in a separate window, their readings are relative and are lined up according to the price data, but their own readings do not correspond to price data, they usually fluctuate within a specific range, for example, from 0 to 100, from +100 to -100. Data relativity is their main difference from trending instruments; a number of effective trading strategies, for example, divergence, are built based on it. Oscillators are used to search for overbought and oversold moments, trend strengths. If indicators of a previous group determine the deal opening time, then the oscillator, in addition to this information, will help you to see the moments when you should refrain from trading and this is certainly a priceless feature for the trader. They include the CCI, RSI, Chaikin Oscillator, Stochastic, RVI, McClellan Oscillator etc.
- Volume Indicators
Such tools enable you to determine an actual trading volume, the interest of players in particular assets, and see what caused the interest in the asset – manipulation or an actual interest of investors. Some of them determine the tick volume – i.e., the frequency of price dynamics at a certain time. They can be used to assess the trading intensity, but they do not provide information on the money amount. Some binary options brokers have their own volume indicators, which help them see a true picture of the traders’ positions, but do not have data on the state of the market itself.
- Channel indicators
These tools are operated in such a way that they set boundaries of price dynamics to identify the points of its reversal. They are equally effective both in flat (resistance/support levels) and in the trend. The most popular among these tools are Bollinger Bands, Envelopes, Keltner Channel, Donchian Channel.
- News Indicators
These are tools that enable you to conveniently follow the news changes and not miss the moments that would bring substantial income to the players. These are authoring tools, for example Urdala news, NewsInfo, NewsCal, etc.
- Level indicators
As you know, levels are essential in binary trading. Thanks to the determination of levels, it is possible to determine wherefrom the trend reversals or strengthening can appear, which is also used when trading. Such tools include, for example, Barry, Fractals, Murray levels, Zone, etc.
- B. Williams indicators
In the terminal Metatrader 4 (and MT5), it is customary to allocate into a separate group the tools created by Bill Williams. They are very popular with players and often found in strategies. These are Fractals, Gator, MFI, Alligator, Awesome Oscillator, Acceleration/Slowdown.
What are «binary options indicators»?
The options market impresses with its capabilities. Here you can get a result the player himself/herself would like to get, while not spending a lot of time on work, you can improve your experience, participate in competitions, etc. The effectiveness of actions here depends in many respects on the tools used, and indicators play an important role in this process.
These indicators are focused on working with the options market, they enable you to analyze the dynamics, take a right decision about the direction to which the asset will continue moving: up or down, which option should be purchased – CALL or PUT. Options allow the trader to use different tools, strategies, different types of analyses, including indicators. The advantage of binary options indicators is that they generate signals that will allow you to open a deal at the right time and in a right direction and make a profit.
Are there any differences between these indicators and indicators of other markets, for example, Forex, stock market?
Binary options are a new way of Internet trading, which features a number of advantages: a fixed increased profitability, an easier way to trade as compared with other markets: here you just should indicate a direction the contracts move: up or down. The same methods of market analysis are used when working. They will work both with the securities market and the Forex market. For example, the same indicators have moved from Forex to options. Therefore, we can conclude that it is customary to use the same indicators in such markets, both simple and complex ones.
However, it is worth remembering that the binary market is characterized by some differences as compared with other markets. Unlike Forex, for example, the fixed-time (expiration) parameters are available here, you should only predict a direction of the price chart. As for Forex, a trader is forced to track how many points the price will advance in the said direction – this affects directly the profit amount, which in binary trading, on the contrary, is fixed. Moreover, you can hold positions here for an unlimited period of time, which can also result in both losses and profits. In options, the trader knows what profit is waiting for him/her from trading an option; he/she receives it as soon as the price starts moving in the indicated direction for at least one point.
Moreover, the trader will have to do a lot more settings for registering a Forex deal and it is also important to understand these concepts and be able to use available tools: these are various orders, credit leverage, spreads and swaps. There are rare indicators on the market that are focused on working with options, but they can be used for different purposes and for investing in Forex: for example, the BOSS indicator, The New Signal Alert, PZ Binary Options, etc. In a sense, binary options have incorporated the advantages and adaptability of Forex, but at the same time they are ready to offer the trader a more comfortable and simple way to work with the lowest risks. Therefore, the specifics of trade, and using different instruments are generally the same. For example, the same scalping strategies, Price Action, long-term investments, systems based on using the same indicators, for example, RSI, MACD, Stochastic, etc. are used here.
It should be understood that the options market is still quite young and, although the same strategies as in the Forex market are used here, however, the Forex market exists longer, the far more strategies are used (for example, for scalping, trend trading, using channels, etc.), there are many high-precision systems among them that have been developed for a long time and have been able to prove their profitability; they can be adapted for options trading, if required – and this is also their advantage. For example, breakdown strategies (breakdown of key levels, channel boundaries, pivot points), based on patterns, scalping and trending ones, etc., are easily adapted for these markets.
As we have already noted, both of these markets (Forex and binary options) have much in common and the trader, starting to work on them, should determine the movement of quotes. Unlike the options market, Forex requires more settings to set a position. Thus, orders, stop-loss and take-profit are used to limit losses. Let’s demonstrate this using the below examples.
How is a deal formed in the binary options market?
It is quite simple, binary options have become so popular thanks to this. To open a deal, you should enter the broker’s terminal, e.g. Binomo, and take the following steps:
- Select an asset in the top toolbar.
- Select the expiration time in a block on the right.
- Here you should indicate the amount as an investment in an asset.
- Indicate a forecast of the quote dynamics direction: up or down by clicking on one of the «hot keys» on the right.
Here, even before the start of trading, the trader can see the amount of the estimated fixed profit that the broker will pay him/her if his/her forecast is confirmed:
How is a Forex deal formed?
Here, unlike binary options, you should take more steps in the system to open a trade deal. To do this, you should enter the broker’s terminal, e.g., Forex Club, and perform the following steps:
- Select an asset type in the top toolbar.
- Indicate the amount of investment in the asset.
- After that, in a panel located in the terminal on the right, the trader should indicate the multiplier size, i.e., a credit leverage, if he/she wants to use this option.
- Here you should specify the parameters limiting gains and losses:
- Stop loss.
- Take Profit.
- Then it is necessary just indicate a forecast for the direction of the quotes dynamics: up or down by pressing one of the coloured keys on the right.
Immediately when forming the application, the player sees the commission size, which should be paid to the broker for the contract. Here, unlike options, the profit the player expects from trading is not indicated as well, this parameter is unknown to him/her until the deal is completed:
Platforms with indicators for binary options
Today, there are many brokerage organizations on the option market that offer bonuses and contests to the customers, including trading in different terminals. The terminal is a special software that will allow a trader to log into the system at any time, work in his/her personal account with a deposit, settings, as well as analyse the market and trade. All terminals are distinguished by their capabilities, a set of useful options, expiration types, here you can also study the assets available for trading with a broker.
Starting collaboration with a specific brokerage organization, the trader hopes to get functional trading from it in a convenient platform that will be simple and understandable for him/her. It is recommended to register a free demo account for this purpose. Brokers try to offer only the best solutions to the client, and their terminals can be both copyrighted and developed by the third-party organizations. We will tell you more about it later.
Author’s terminals with indicators
Brokers such as Binomo, Olymp Trade, Binary, INTRADE.BAR etc. offer the author’s terminal. Availability of the author’s platform in the company indicates its serious approach to working in the market, and that it is ready to invest a lot of capital in its development as well as development of a unique trading system. Advantage of the author’s terminal development is that companies try to simplify the work for clients here, implement only the functionality required for the user, depending on the account type, etc., including offering unique features, for example, expiration types, convenient trading history, information windows and a set of indicators.
One of the perfect and even unique platforms on the market is offered to clients of this broker. This is a progressive options trading program, being unparalleled in the industry. It is convenient, pleasant to work in it, it is easy to trade even for a beginner, who will quickly get used to it. A comfortable black background of the program, a convenient arrangement of options and elements, absence of unnecessary details – all this confirms the title of one of the best platforms on the market. It offers a large selection of useful functionality: changing the type of chart, choosing expiration, assets and tracking information on them, working with graphic elements and indicators. 14 indicators are available in the Binomo platform: Alligator, Moving Average, Stochastic, CCI, ATR, Bollinger Bands, Fractals, RSI, Awesome Oscillator, Momentum, Parabolic SAR, Ishimoku, ADX, MACD. You can add any number of tools to the chart, implement work with different strategies here, which will also be convenient for traders. When adding indicators to the chart, you can configure them.
This binary option broker also offers clients a job in an author’s platform with a great number of trading opportunities. Designed in pleasant light colours, this platform makes it easy to set up to productive work. There is nothing in excess, just all necessary options: selecting asset, expiration and type of chart, information on the trader sentiment indicator, graphic elements, a large set of technical indicators that are conveniently divided into types: trending (SMA, WMA, Parabolic, ZigZag, Alligator, Ishimoku, etc.), oscillators (MACD, RSI, CCI, Aroon, DPO, DeMarker, Momentum, Gator, etc.), and Fibonacci Fan, Fibonacci retracement and a trend line are offered here as graphic elements. It is worth noting that this platform offers the largest set of indicators among author’s developments of the companies, which is also an indisputable advantage of a brokerage organization.
Binarium also provides its client with an author’s platform characterized by convenience and great functionality. It is easy to get acquainted with a terminal here: you can study assets, expirations, types of graphs, place up to 4 tools in a window. There are also graphic elements and 13 indicators (for example, Bollinger Bands, SMA, Stochastic, Alligator, RSI, MACD, etc.).
Standard terminals with indicators
Brokerage organizations often offer their customers to work in terminals developed by the third parties. Such terminals are found in both young and experienced companies. Is it worth considering that offering a standard terminal is a bad sign for a broker? It’s not actually worth it, it is important to study all the components of the company’s activities for this purpose (availability of a license, experience, customer reviews, etc.). Standard terminals are also popular in the market; traders around the world prefer working with them; their trading opportunities are endless: e.g., MetaTrader 4 and its updated version of a new generation. In addition to this platform, the most common are TradeSmarter, Tradologic, TradingView, Vortextrade, etc. We will consider them in more detail in this part of an article.
- MetaTrader 4
This platform, sponsored by the MetaQuotes Software Corp. brand, a leading developer of products for the markets; it is very popular in a trading community. It is unlikely that you can find a trader who has never heard of it, but all because it offers the user to get a full-fledged space for working in a matter of seconds regardless of their experience. No wonder this powerful product is offered by such a large number of market brokers: World Forex, Yardoption, Grand Capital, InstaForex, Alpari, Larson Holz, etc.
MT4 is a legendary platform enabling you to trade comfortably in the market, quickly place deals and adjust them, change the expiration time, type of a chart, work with several charts, personal account settings, track the trading history. It is also easy to conduct here the full-fledged analytics using a large number of tools: graphical elements, a lot of indicators (more than 30). One can load any number of author’s and rare indicators and entire trading systems to the program, which does not limit the player in using trading strategies. Traders can use the convenient MetaEditor to write indicators, scripts, a strategy tester, and conduct auto-trading, trade in a mobile application, etc. MT4 is a legendary platform, universally popular with options investors, it is rightfully considered to be one of the most technologically advanced and functional solutions for full-fledged trading. The brokers generally offer to download software of a terminal to the computer desktop for further work; moreover, its web version is also available on their websites.
- MetaTrader 5
This multi-market product is an updated program of the previous version and is deemed to be a perfect product from MetaQuotes Software Corp. Retaining all the advantages of a previous platform, the terminal offers even more unique opportunities to the players. In addition to binary options, you can here trade on Forex, securities and futures from the same account. More options are available for advanced analysis. This is a large selection of indicators, conveniently divided into groups:
- Trending ones: Ichimoku, Adaptive Moving Average, Envelopes, Bollinger Bands, Fractal Adaptive Moving Average, etc.
- Oscillators: Momentum, DeMarker, MACD, Chaikin Oscillator, Stochastic, ATR, Force Index, etc.
- Bill Williams indicators: Alligator, MFI, Fractals, Awesome Oscillator, Gator, Accelerator Oscillator.
- Volume Indicators: MFI, A / D, Volumes, On Balance Volume.
More than 40 chart patterns are also offered: Gann, Fibonacci, Elliott tools, geometric figures, channels, and much more.
More than 80 built-in indicators and other analytical objects are available here, you can download, buy and install indicators in the library; you can also create your own scripts using the MQL5 language. This platform is available from brokers such as Alpari, Corsa Capital, etc.
This platform is also popular with traders, especially professionals. The terminal is compatible with any devices, functional and at the same time is easy to use. Its advantages are as follows: safety, stability, a large selection of options for market analysis, for working with a chart (change of chart type, choice of assets, indicators, graphic elements, etc.). Thanks to a pleasant design in dark colours, minimalism, and absence of unnecessary elements, it is pleasant to work here. The interface is simple and straightforward, even the beginner trader can deal with it.
One of the brokers offering clients this solution is Finmax. Although this is a young broker, it already has a positive reputation, high ratings and estimates of the service – the reason for the fast deafening success is mainly that the company made a right choice in favour of TradeSmarter, which is deemed to be one of the perfect solutions on the market. Three indicators are now available in the platform: SMA, MACD, Bollinger Bands, which is actually inconvenient, especially for the professional market players who use different functionalities in their work. In addition, there is no way to configure them. The company should eliminate these shortcomings, although with it, it is considered to be a high-quality mark, a revolutionary development being comfortable for any trader.
This terminal is known in the market since it offers a wealth of opportunities for analysing asset dynamics. TradingView or «live chart» is a mandatory tool for a progressive player, for whom the service comfort and an ability to implement any idea in it are of great importance, as well. TradingView is a powerful program, especially where the broker’s terminal capabilities end. A large number of indicators are built into the platform, including author’s and rare ones, thanks to which any strategy can be implemented here; moreover, there are specific profitable methods on the market that are focused specifically on working in a «live chart».
The terminal is made in light and dark colours – the trader can choose design that is the most convenient for himself/herself. It offers a large selection of assets of various financial markets, including futures, stocks, cryptocurrencies, CFDs, a lot of options for market analysis: graphic elements, elements for drawing and for writing text, more than 1,000 indicators – both paid and free ones, which are divided into sections: «Built-in», «Public», «My scripts», «Volume profile», the Application Store is also available here. Binary options brokers could not help noting the advantages of the platform, so it is not uncommon that they offer the system work in TradingView to their customers (for example, Binary, INTRADE.BAR, Migesco).
Vortextrade is a less popular but still frequent platform. For example, young company Yardoption provides an opportunity to trade in this terminal. Despite this young age, it is important for this company to provide its client with only proven software that will make trading both convenient and functional. Vortextrade is one of the solutions that can simplify the trader’s work. The terminal is made in dark colours, everything is very concise here, there are no extra blocks that would distract from the main work. You can choose assets, change expiration, type of chart display, work with indicators; there are only 4 of them here: ATR, EMA, RSI, SMA. At the same time, unlike all the terminals we examined earlier, it is impossible to change their settings, which may be inconvenient for a client.
In which way are indicators used in the broker’s terminal?
In the Binomo terminal (website), the indicators are located on the bottom toolbar, in the same place where the player selects the expiration time and a graph display type:
By clicking on the «Indicators» tab, he/she can study the list of tools for technical analysis offered on the platform. These are both trend and oscillatory indicators, all of them in terminal 14. When choosing an indicator, you can configure it so that it is conveniently displayed on the chart: these are the colours of its lines, periods, and other indicators. When the indicator is ready for work, it can be added to the chart by clicking on the «Build» button. After that, the graph will look like this:
Here, the Alligator and MACD indicators are added to the chart. You can change their settings at any time, delete and add other tools.
- Olymp Trade
You can also work with indicators in this terminal, and a platform offers the largest set of tools among brokers’ author developments. The button with a choice of indicators is conveniently located immediately in the field of a trading chart, so finding this tool is not difficult:
By clicking on the «Indicators» button on the Olymp Trade website, a trader can study a large list of the tools offered here. As we already wrote, all of them are divided into categories for quick search of a required indicator. When adding an indicator, you can configure it to the parameters required for the strategy, change the colour of its lines to conveniently work with it. Having worked with its parameters, you can minimize the settings panel and start working on the market. The graph looks like this:
There is nothing in excess, all the instruments look concise. Alligator and DeMarker are added to the chart here.
This broker also offers working in a system with indicators its many clients (Finmax website). There are only 3 of them here; it is certainly inconvenient, and they are located immediately in a central field of the main chart. Having selected one of the indicators in the field, you can immediately add it to the chart by clicking on it. Then it will automatically appear in the main trading field. There is no option of configuring indicators in the terminal, which is also inconvenient for traders, especially for professional players. However, when you hover over the indicator line, its parameters will be displayed. You can add several indicators to the chart or delete them when necessary.
This terminal offers a large set of tools; you can learn them by moving to the «Indicators» tab. Having selected the necessary one, you can configure it. Settings can be changed at any time (this option is located on the chart together with the tool name), you can delete it and add other tools here. After adding necessary indicators to the chart, the player can start working. The main space is as follows:
Bollinger Lines and Balance of Power Indicator are placed in separate fields. It is convenient to monitor the asset dynamics, to monitor behaviour of these tools.
13 indicators are available for the trader in the terminal of this broker (Binarium website). In order to study their list, you just should click on the special button at the very bottom of the platform:
After selecting a tool by clicking on its name, you can add it to the main workspace. At the same time, you can configure it to conveniently track its signals. After adding the Alligator to the trading schedule, the main workspace of the platform will look like this:
You can add here other tools; for example, RSI, and at the same time the main workspace will also be concise; it’s comfortable to monitor the market picture here:
What should you do if the platform does not have a correct indicator?
A trader is often forced to face the fact that there are no indicators in the broker’s terminal/there is no necessary tool for finding signals and working on a strategy. What should you do in this case? There is a way out and today most players use it. This is a job in the Metatrader 5 terminal (or Metatrader 4). The advantage of this solution is that this unique and powerful platform not only contains many indicators, most often inaccessible to the trader, but also allows you to install any indicator in its library for the trading system. This is certainly convenient for those traders who would like to get the most out of their work in the market. MT5 (or MT4) is a solution that will help them to achieve easily this goal, but there are some «buts» a trader should remember about.
Firstly, these terminal quotes may differ from the broker data, therefore it is important that both MT5 (MT4) and the broker have single liquidity providers. Today, MT5 supplies customers with data from such companies: Alpari, LMAX Exchange, Hotspot FX, FXCM Pro, Integral, Currenex, FastMatch, Swissquote. Secondly, you can add an indicator to the chart in MT5 in different ways, more detailed information on this will be provided in the next part of an article.
How should you add an indicator to the MetaTrader 5 chart?
- Method 1. Through a library of available indicators.
First you need to check if there is a necessary tool in the MT5 library, because the program, after installing it, contains many standard tools. To check availability of an indicator in the system, it is enough to search for it this way: Insert – Indicators – Trend (or the Volumes, B. Williams, Oscillators or User sections). By clicking on a tool, you can immediately add it to the chart, pre-setting it. If there is no indicator in the program, you should use other ways to add tools to the terminal.
- Method 2. Through the «Market».
The «Market» is available below among various tools of the MT5 platform, where you can download any indicators to your terminal (paid, free ones). It is very convenient: you should not search for an indicator on the Internet, which most often does not happen quickly. It is more convenient to work in the MT5 system, being not worry that the downloaded file may either contain unnecessary partner content or dangerous files, which also occurs on the network.
Having selected an indicator, you can study information on it by downloading it by clicking on an appropriate button. After clicking this button, the indicator is automatically added to the «User» folder. The system signals this using the indicator menu that appears on the left. You can add it to the chart by clicking on a specific tool:
Moreover, you can close this panel and use the main menu along the path: Insert – Indicators – User. After selecting the tool and completing necessary settings, you can add it to the chart. Moreover, you can close this panel and use the main menu along the path: Insert – Indicators – User. After selecting the tool and completing necessary settings, you can add it to the chart:
- Method 3. Find the indicator on the Internet and install it in the indicators folder on the computer.
It also happens that even in the «Market», both among paid and free tools, there will be no tool you require, then traders look for it on the network and download it in the usual way – in the tool catalogue via their computer. How does this happen? First you need to find the indicator itself, which for the MT5 program should have the format «mq5» (or «ex5»):
After downloading it, you should open the terminal data directory. Then you should go this way: open the MQL5 – Indicators folder. In the Indicators folder, you should copy the tool file:
And that is all. File already added to user platform. Now you should restart it; you should close and reopen it for this purpose. Then it’s worth checking if there is an indicator installed, for this purpose you should follow this path in the top menu of a platform: Insert – Indicators – User. By clicking on the installed indicator, you can immediately add it to the chart by pre-setting it or leaving its standard parameters. You can start working:
How to receive signals for trading based on indicators?
This is one of the main issues the traders who start working in the market are interested in, since signals for trading are the things that affect its performance. Signal sources can be both individual indicators and complete trading systems. The traders also often use the brokers’ signals: both special services and analyst recommendations. Nevertheless, their main source is the performance of technical indicators. In this case, the trader usually works simultaneously in the broker’s terminal and the MT5 (MT4) platform. We will show the work on searching the RSI signals in the MT5 terminal. This tool is popular with traders, especially among beginners, as It has a simple principle of operation, generates clear signals that enable you to start profitable trading: these are signals of divergences, a central line intersection, overbought/oversold:
Trading options with RSI in MT5
If the RSI is located at indicator 70, then this is an overbought zone (downtrend), you can purchase PUT options at this point of time:
If the RSI is located at indicator 30, then this is an oversold zone (or an uptrend), you can purchase CALL options at this point of time:
Centre line intersections:
If RSI crosses line 50 while moving up, you can execute CALL options:
If it crosses line 50, moving in a downward direction, you can execute PUT options:
In case of divergence, maximums of the price line are not confirmed by RSI, you should purchase a contract with the CALL value:
When converging, the minimum cost line is not confirmed by RSI, it is worthwhile to purchase a contract with the PUT value.
Binary options indicators
- Moving Average
This is the tool that is one of the first to be used by beginners on the market, it demonstrates the average value of a price for any time. It has the shape of a curve to be calculated based on the value dynamics. This is a constantly bending line on the chart, repeating the price line movement, but following it more smoothly. We can say that MA is the player’s assistant, which is usually used to confirm a trend, not for nothing that it is so often used in strategies. As a signal indicator, MA is usually used with a period of 40. In this case, purchase of the CALL option at the new candle opening occurs if the previous candle is closed above the MA; registration of the PUT option occurs if the price crosses the MA from top to bottom, and the candle is closed below the line.
It is also one of the popular tools that, following the trend exactly, is able to show the ratio of two moving averages. It is the most effective in case of strong market fluctuations, it is required when searching for moments of divergence, intersection with price, overbought/oversold. Its separate advantage is that it shows the best positions for entering the market, as it also has properties of a leading oscillator. During work with searching for signals when crossing a zero line, traders shall be guided by the following indicators: if the indicator tends to go below the central level, then you can register purchasing the PUT option if, on the contrary, it grows higher, you can register the CALL option purchase.
- Bollinger Bands
This indicator is able to determine abnormally sharp deviations of the price from the trend, which is especially valuable. Since it is an oscillating instrument, it is used for market volatility, it will enable you to assess whether the price is low or high as compared with the trend, to predict a possible rise/fall to its level. Due to the fact that it detects extreme price deviations, you can adjust your strategy. At the same time, it is best suited for determining positions for entering the auction with a clear trend. In case of a stable bull trend, the best position for trading will be the point of time when the price line broke through the lower band and then returned back within the range. In case of a stable bearish trends, the optimum entry position is when the price goes above the upper limit and then will return within the range. As for the side trend, there is a large number of false signals here, it is worth being careful with this trade.
- Average Directional Index
This tool will be useful in determining the strength of price movement. If a trader works with trends, then this tool is a real catch for him/her. It is simple, contains a minimum number of settings, it is reliable, but since it is still a trending tool, its signals lag behind the current market situation, you can’t do without lag. This indicator consists of 2 lines (+DI – green lines; -DI – red lines), the position of which relative to each other is already effective signals: when the green-coloured line grows above the red one, you can register CALL option contracts; if the red-coloured line above the green one, you can register the PUT option contracts.
It is also one of the popular indicators used by traders. Despite the fact that when you add it, a complex figure is formed on the chart at first glance, but it is easy and simple to work with it and you can verify this by understanding the tool features. It consists of 3 moving lines (having different settings of periods), which resemble the shape of an alligator, which allowed him/her to be called that way. As traders are aware, the market can be in a flat (the Alligator is sleeping), it can move dynamically changing trends (the Alligator has woken up and wants eating, it starts hunting) and knowing its phases will enable you to enter the market on time and make profit from trading options.
The Alligator is used to determine market trends being the most favourable for profit, its purpose is to show the player an emerging trend. The main drawback of the instrument is that, like all trend indicators, it is lagging. Often, trading with the Alligator occurs according to the signals of its lines: when its green MA crosses a red one from bottom to top, it is possible to register CALL option contracts, when the lines of its lips cross the teeth in a direction from top to bottom – you can register the PUT option contracts.
This is one of the tools being the most popular with traders having different work experience. Its advantage is that it is incredibly useful, but very simple, it does not require serious settings, generates simple signals, ranging from 1 to 100, it shows the price extremeness. RSI evaluates the dynamics of prices relative to its previous data, enables you to determine the players’ sentiment, overbought/oversold, correction/reversal, makes it possible to understand when the price, having turned around, will give rise to a trend. Here you can trade, monitoring, for example, overbought/oversold conditions: if the RSI crosses the indicator 70 from top to bottom, you can set up a purchase of options DOWN, if it crosses the indicator 30 from bottom to top, you can arrange the purchase of UP options.
It is also one of the main traders’ tools, reminiscent of RSI, but it characterized by simple operation, a minimum number of settings and at the same time high signal efficiency. This is one of the oldest tools that is actively used in determining the current price percentage, as well as rising and falling prices, when searching for convenient positions for entering deals. It consists of the% K (fast) and% D (slow) lines, the data of which ranges from 0 to 100. Thus, a corridor is formed, the data of which on overbought and oversold assets can be used in work. Stochastic is most often used in such a way that traders buy contracts when one of its lines drops below 20, and then rises above it again; the contracts are sold when its lines rise first above 80, and then again fall below this mark.
This oscillator, which tracks data on the price movement speed, is also actively used by traders to obtain information on overbought/oversold, to see pivot points. It resembles Stochastic in many ways, it is also easy to use, but effective, most often it is used according to this strategy: purchase of the UP option occurs when it is oversold (i.e., the tool indicators are within the range from -80% and lower); sale of the DOWN option – when the asset is overbought (i.e., the tool indicators are within the range from -20% and above).
- Average True Range
This oscillator shows information on current market volatility, determines the range of price fluctuations (both maximum and minimum). Its difference and value is that, not answering the question «where will the cost line move», it shows market volatility, which indicates the new trend emergence after the flat. Thanks to this, it has become popular with traders who actively use its data in various strategies. Obviously showing the market phases or activity levels, it demonstrates a flat, as well as bullish or bearish trends, enabling the player to get information on the time when to refrain from work, when to enter a position. At the same time, the stronger the trend, the more reliable is the entry point, which minimizes losses. This tool is simple, interpreted in the same way as other volatility indicators: the higher its indicators, the higher the likelihood of a change in a trend, the lower they are, the weaker the trend.
- On Balance Volume
This is a trending tool, one of simple and effective similar tools. Its data is calculated according to information on trading volumes. The tool was implemented one of the first into technical analysis to study cash flows, it confirms trends and trading volumes. It is actively used by traders since it gives leading data. It is generally believed that if a closing price is higher than the previous one, then the candle volume is added to the OBV indicators; if it is lower than the previous one, then the data should be deducted from the OBV; if the cost data coincide with the previous ones, then the OBV remains in the same position. If the volume increases or falls without changing the cost, this confirms the fast-strong dynamics. With the growth of both tools and prices, an upward trend prevails and vice versa. OBV enables you to work with support/resistance levels, discrepancies, confirm trends and reversals. If the information is confirmed by price, you can buy or sell assets.
- Market Facilitation Index
This indicator is translated as the Index for Market Facilitation; it is deemed to be one of the most effective tools for assessing the state of a trend and market reaction to a change in trading volumes. According to a structure, it resembles RSI, it is convenient, simple and understandable, therefore it can be used by both beginners and trading professionals.
As soon as the buyers’ or sellers’ interest in an asset fall or grow, this is reflected in the market productivity and affects the trading volumes’ indicators. When adding MFI to the chart, you can work with information about the strength of cash flows, intensity of investments in assets. By comparing the data on positive/negative cash flows, the trader can get information on the trend strength. Like RSI, it is used to determine overbought/oversold and divergences. When working with overbought/oversold signals, it is customary to act like this: sell PUT options if the MFI is above the 80 mark and crosses it from top to bottom and buy CALL contracts if the tool is below 20 and then crosses this indicator in the direction from bottom to top.
- Accumulation/Distribution (A/D)
The Accumulation/Distribution indicator is an effective trend source of data on trading volumes; it enables you to receive information on the state of supply and demand for assets to understand whether players really buy and sell them. This tool allows you to identify discrepancies or current trends, has established itself as a reliable data source. With strong downtrends/uptrends, the A/D moving in the same direction as the price, confirms a trend. By tracking its behaviour on the chart, you can buy and sell assets.
- Andrews pitchfork
This is one of the interesting tools for market analysis, which will provide information on price movements, trade profitably both with a trend and against it. It is especially useful for those players who prefer working with channel strategies – simple but effective ways to search for trend direction and trading signals. When added, the indicator takes a shape of a pitchfork of three direct levels. At the same time, it is worthwhile to open deals in the following cases: when bouncing off the lower border of a channel, you should buy CALL options; when bouncing off the upper border of the channel, you should buy PUT options. Due to construction of the tool in the form of a channel on the chart, you can easily track the asset dynamics, nature of the trend or its correction, making the right conclusions, and enter the deal on time.
- Keltner channels
This is one of the popular channel indicators, quite well distributed on the market today in the form of various strategies. Its analogues: Bollinger Bands, Envelopes. This tool consists of 3 lines; it is used to determine price breakouts, trends, and overbought/oversold information. It keeps track of trends, but instead of «per cent» (like Envelopes) or standard deviations (like Bollinger Bands), data from the average true range indicator is used here, which reduces the number of false signals. Due to the fact that the tool refers to trend indicators, it signals the market state, forming all the data within the channel: if it is directed up, this indicates an uptrend, if down – this is a downward trend. However, like other trending instruments, its data are still late.
This classic level indicator is actively used to accurately search for support and resistance areas. The levels here are those elements that allow you to get the most information on the market and enter into a profitable deal. Moreover, it is a simple and understandable indicator both when building it and when working with data. Zone is ideal for beginners, for those who need information about the supply and demand for the asset. Trading is conducted either by breakdowns or by bounces from the levels: if the price bounces off the support level, you should buy an asset, if it is based on the resistance level, you should sell it; if the price line breaks through the support level, this is the time to sell the asset; if it breaks the resistance level, then it is time to buy it.
- SS Support Resistance
Like other level indicators, this tool has a similar structure and principle of operation, allows you to make a profit when working with support and resistance levels. In addition, here you can configure the alert and receive accurate system signals in time. After adding the levels to the asset chart by just a couple of clicks, you can start working using either the same strategy for rebounds or breakdowns.
- AutoFib Trade Zones
It is also a tool actively used in the market by those players who prefer to trade using signals generated by level systems. Here it is proposed to determine the levels of opening deals using the Fibonacci grid. AutoFib Trade Zones is used in determining zones of cost rollback and timely entry into a position; we need a Fibonacci grid for this purpose. At the same time, zones for entering the market here are conveniently marked with colours. As with other level indicators, it is customary for a trader to apply trading strategies for bounces and breakdowns.