Binary Options Oscillators

Binary options are something that is constantly talked about, it is an area of activity characterised by inconsistency, but, however, it attracts even more with its advantages: accessibility, ease of work, low money amount to start, the ability to work without an initial contribution. This market, although it attracts the Internet users with its capabilities, can also be repelled by the amount of knowledge required to significantly increase an amount of the deposit.

When starting work here, you should at least remember that trading at random is not an option and this approach will only result in losses and disappointment in this Internet earnings area. Experienced players and those traders who are set up for serious interaction with it, try to undergo the full-fledged training, in particular, using a training account, participate in the contests, study useful literature – in a word, they make every effort to make themselves more confident in the real market (binary options trading training).

One of its advantages is the ability to work with serious tools that will assist you in making the right decision to enter a position and complete your trades with a profit. These are indicators for binary options and oscillators. These two groups of tools relate to technical methods for analyzing the dynamics of assets that are quite accessible on the Internet, including on the trading floors of modern binary brokers. In this article, we’ll talk in detail about oscillators designed to determine market sentiment in advance and take the right positions to increase account income.

Top 3 best binary options broker: test their terminals

BrokerMin 1st DepositLeverageSpreadFoundedReviewOpen Account
OlympTrade$102014ReviewVisit Broker Demo
IQ Option$101:1000from 0, 007 points2013ReviewVisit Broker Demo
INTRADE.BAR10 USD2016ReviewVisit Broker Demo

 

What do «oscillators» mean?

Such tools (from the Latin word «oscillare» – to fluctuate) are called the parameters, the programs used in the technical analysis of the asset sentiment and study of the market situation. Or in another way, this is a type of graphical indicators that identify instantly a state of the object observed by the trader, that determine which stage it belongs to – oversold or overbought. Moreover, the oscillators are used in situations of divergence (convergence/divergence).

Such tools are most often placed immediately below the asset chart in a separate window, which makes it convenient and simple to work with their data. We should note Stochastic among such tools, which is familiar to every trader – this is one of the first similar indicators that perfectly copes with a role of reliable signal search. An important advantage of oscillators is that they act ahead of schedule, providing valuable information to the trader in advance and this becomes a strong secret to the success of players, which, of course, allows them to «win» during trading: put the right deal and get decent earnings from trading options.

The market is characterized by a change in trend: is it a flat or a trend. If the tools of the same name are used for trends, then it is customary to use oscillators in case of a flat, which are indispensable in the trader’s strategy, they enable you to get information about the asset dynamics in advance. Analyzing the information of oversized and oversold, they look for the maximum or minimum points, which indicate weak dynamics or the asset’s desire to make a turn in the opposite direction. Thus, this group of market analysis tools will be useful when working in a relatively calm state of the market. It will also be indispensable for market beginners, who need to accurately determine the «bullish» and «bearish» sentiments. In this case, it is customary to act using the rule according to which, when the tool is located at the very top of a window, we are talking about an upward, growing sentiment; when it is located at the lowest points of the window, it is worth talking about the downward, falling sentiment of the asset.

 

When did the oscillators appear?

Such automatic tools, or they can even be called «machines», were not always «at hand» for the trader. Investors, speculators and players are initially forced to either independently perform all calculations and draw charts – this certainly complicated the trading work being already difficult. Everything became easier with the advent of computers – the first indicators and oscillators appeared, which took upon the difficult work of calculating market information. The trader only needs to analyze the existing data. The first oscillators that appeared in the middle 20th century was the Duffing oscillator with the simplest mechanism of operation, then the more complex ones appeared Stochastic, RSI, Ichimoku, MACD, Chaikin oscillator, McClellan oscillator etc.

Today, there is a computer and the Internet in every house, which allowed further development of trading; now it is easy to find the right tool on the Internet and install it on the platform; nowadays, it’s easy to register with a broker, open its terminal and use the tools that are available here. Development of the Internet and technology enabled trading to develop rapidly and become options available to everybody. Today, the player has access to several dozens of different oscillators and you can find any of them and include it in your strategy for working in the market.

 

Types of Oscillators

Due to development of the Internet and technology, many such tools are offered today, and all of them are useful for the player to any extent depending on the task. But how to make a right choice of the oscillator and use that particular tool in a particular case? Knowledge of the classification of oscillators will assist in it, and we’ll talk about it in the next part of our article. All similar tools can be divided into the following categories depending on their functional features:

  • Tools that measure a trend

This category includes tools that assist the trader in determining the trend, i.e., strength, direction and duration. For example, they include trending tools such as MACD or ADX, etc.

  • Tools that measure volatility

This category includes tools that measure variability of the assets’ value relative to an average or a previous value indicator. These are, for instance, such tools like Average True Range or Chaikin’s Volatility.

  • Those oscillators that measure indicators of the value speed

It is also customary to call them speed ones and their peculiarity is that they are used to determine speed of the value dynamics for any time. There are a lot of such tools, for instance, RSI, Commodity Channel Index, Momentum, Stochastic, Williams`%Range (%R) etc.

  • Tools that that measure the volume of deals

They are also called voluminous ones and their advantage is that they measure the volume of deals. For example, Volume Oscillator, On Balance Volume can refer to this category.

  • Oscillators that measure cycle performance

They are also called cyclic and their advantage is that they can be used to determine cycles. For example, this category includes MESA Sine Wave Indicator or Fibonacci Time Zones.

 

What are «oscillators for binary options»?

The question of why the options market is so attractive and both simple and complex at the same time. For sure, it impresses with the features available here. Moreover, when working here, the players themselves affect the amount of profit, can do everything to get the desired result. For this purpose they improve their experience, work on a binary options demo account, take part in the contests that offer them attractive prizes, in particular, in the form of money.

Moreover, they pay great attention to the study and testing of indicators and oscillators – those technical tools that provide data on the asset dynamics, predict their direction in advance and allow you to make UP or DOWN bets analyzing the market according to their internal mechanisms. Such oscillators are actively used by players although they are represented to a lesser extent in the option market. Thus, RSI RSI, Stochastic, Momentum, MACD, CCI etc. are popular with beginners. They can be used quite well when trading binary options and achieve decent results, if they work correctly.

Difference between options oscillators and Forex oscillators

Is there any difference between oscillators and such tools of other markets, for example, Forex? When answering this question, it is worthwhile to understand that options are not so long ago offered as a separate market with its own capabilities and laws. They are interesting mainly due to a number of advantages: decent profitability, a more simplified way of trading than in other markets (because in order to get your profit in, let’s say, 60 seconds, you should only indicate the quotes direction: down or up).

There are different financial markets. The same tools and types of analyzes are used in the work here, depending on the tasks set by the investor himself/herself. This applies to the Forex market, securities market, etc. Moreover, indicators and oscillators were initially used solely on Forex, wherefrom they were transferred to binary options, which appeared much later. Thus, both simple and complex oscillators, popular and author’s tools started to be used in options. The options market also differs from the Forex. Thus, we offer a fixed time for the bet duration (expiration of binary options), you should only determine the direction of the assets dynamics to get profit.

Things are more complicated on Forex: the players here, when trading assets, should track how many points the quote direction is moving and this affects the profitability they will receive as a result of work, which, on the contrary, is fixed in options and the players know in advance what profit they get in case of correctly guessed dynamics of the asset (the whole truth about Forex). In Forex, you can also keep an open bet for the amount of time that a trader considers necessary, and this can result in both decent earnings and high expenses. Everything is simpler in case of the option market: being aware of the income amount, the trader will receive it immediately as soon as the quotation has moved at least one point in the right direction.

When placing a trade on Forex, the trader should specify more of its parameters, he/she should use and know more concepts than, for example, when working with options. At Forex, it is important to understand what is meant by swaps, spreads, leverage and differences between orders, etc. Everything is much simpler with options and you can even say that, having appeared as a separate market, they have incorporated the maximum of useful options for the Forex market: technological effectiveness and understandability, but at the same time they have become more convenient, simpler, more comfortable and are characterized by the least risks. Specifics of work are the same here in many ways, they use the same tools, for example, one can trade on scalping, Martingale, and work with the long-term assets, etc. Both of these markets are characterized by similarity, but there are some differences when working with them. To start trading on Forex, you should make more settings, you should know more factors to be considered in the work. For example, it is worthwhile to use stop loss and take profit correctly to limit losses. Let’s consider it later using the example.

 

How is a deal formed in the binary options market?

This happens really simply and precisely because of its simplicity; the options instantly gained such a popularity. To start trading here, you should enter the brokerage organization’s platform, e.g., INTRADE.BAR, and perform the following actions:

  • Choose an asset from among the tools offered.
  • Choose expiration.
  • Indicate the investment amount.
  • By clicking one of the buttons (up or down), indicate the forecast for the quotation dynamics.

Moreover, the trader sees in advance in the system the amount of his/her income (and losses, respectively):

Binary options oscillators: Binomo terminal

 

How is a Forex deal formed?

If we are talking about Forex, everything is somewhat more complicated and this market is not as simple as options; you should make more settings to enter the auction and place a bet. First, the player enters the brokerage organization’s platform, for example, in the Metatrader 5 terminal, and performs a series of actions:

  • Choose an asset type.
  • Indicate the investment amount.
  • Execution type.
  • Stop loss options.
  • Take profit parameters.
  • Deviation parameters, comments.

When trading on Forex, the players do not see in advance the profit amount, which is not limited by the system limits; however, with this approach, the risks are also much higher than in binary options, where both these indicators are fixed.

 

Platforms with oscillators for binary options

A large number of trading programs with various possibilities are offered in the option market, which has been developing dynamically in these recent times. Therefore, a difficult question about choosing the terminal among this variety that will definitely suit the trader and make his/her presence on the market both comfortable and functional can be considered to be fair and urgent. Such programs are a special software solution that will allow you to start trading at any convenient time, work with your personal account, account, schedule – to track all the options required for modern trading. There are a lot of such programs, all of them, despite of a number of similarities, are characterized by differences in their capabilities, availability of any options and tools.

To study these possibilities of such a program, it is customary to register a demo account and study the platform «in practice» – during the training trading of virtual capital. The players are confronted here with the concepts of «author’s platform» and «development of special organizations». Which platform will be more profitable? Where is better to trade? We will try to answer these questions in our article.

Author’s terminals with oscillators

Such programs are developed by brokerage organizations themselves. Author’s platforms are offered on the market by Binary, Binomo, ExpertOption, etc. It is generally accepted that availability of such a platform in the organization confirms its serious intentions to work in this area, that it is interested in providing a unique and convenient service for customers. Advantage of such software development is that they are designed to simplify work, remove all unnecessary functionality and leave those solutions that he/she really needs. Moreover, you can implement here the innovative options, convenient windows, personal accounts, types of expiration, etc.

For all the customers who deal with this brokerage organization, a unique software solution is offered that has no analogues on the market. This trading program is convenient, focused on the comfortable work with option contracts, in particular, for beginners. A wide range of useful options is implemented on the platform: types of graphs, types of expiration, various assets, graphic elements and a variety of oscillators. By adding just one of these tools to the chart in a couple of clicks, you can configure it and work here with absolutely any strategies.

Binomo broker terminal

This company also offers customers an author’s development of the platform, being a unique, simple and convenient. It is easy to understand the system features here, you can study the market opportunities and join the auction, completing quickly the deals even if the client is just starting to make the first steps in option trading. You can change assets and types of expiration in the platform, as well as types of graphs, add graphic elements to it, various oscillators, for instance RSI, Stochastic, CCI, MACD etc.

Binarium terminal for trade

  • ExpertOption

The author’s platform of this company is convenient and functional, it contains a lot of interesting options (changing a type of workspace, visualizing the «social trading» option on the chart, etc.) and concise design. This unique program is easy to learn and will be comfortable for beginners. In addition to an intuitive interface, there is the ability to select assets, change a type of the chart, work with graphical tools, oscillators, e.g., MACD, Fractal, RSI. You can also upload your own tools here, which expands the traders’ capabilities.

Standard terminals with indicators

There are also such brokerage organizations on the market that offer customers to work with platforms that were developed by the third-party companies specializing in the creation of such trading solutions. Such programs are found both by experienced and young brokers; therefore, it cannot be unequivocally assumed that if a company does not have its own terminal, then it is inferior to the competitors. No, this is not entirely true, because such a decision will require studying in detail the organization’s activities, reviews of its customers, and the license.

In fact, such standard solutions are even in demand in the market, since, having started working on the same platform, they would like to continue working with a broker, but in the software solution they already worked – it is reliable and, of course, affects the trading performance. The popularity of such platforms in many respects is that their functionality is more expanded than that of broker programs, which also attracts players. For example, this applies to MetaTrader 4 and MetaTrader 5. Tradologic, TradingView and TradeSmarter. are also in great demand. Let’s talk about them more detaiedl later.

  • MetaTrader 4

Perhaps, this is the most popular such a program for advanced trading. It is quite rightfully called legendary, reliable and simple. Today, there are no players who would not hear about it, and everything due to its powerful functionality, a large set of various options, ease, and comprehensibility. When opening the program, you can «in two ticks» organize a trading space for a player with any trading experience – both for a beginner and for a professional. In MT4, you can use a wide range of tools, oscillators (for instance, Stochastic, RSI, Моментум, MACD, Volumes, ATR, Zigzag etc.), types of deals, charts, expirations, history of your trades, etc.

Moreover, you can download here additional tools and trading systems, implement any strategies, be engaged in auto-trading, work in the MetaEditor editor to create your own oscillators. All this makes the program almost limitless for any wishes of the investors who can implement any trading methods here. A large number of brokers currently offer this powerful program to its customers, for instance Yardoption, Grand Capital, Larson Holz, InstaForex, World Forex, Alpari.

MetaTrader 4 trading in the terminal

  • MetaTrader 5

Being an updated solution to the previous software product, this program offers even more unique options to the player. Functionality of the previous solution is preserved here, but even more features are available, which certainly made it instantly popular with investors. In MT5, you can work with options and other markets (Forex, securities prices, etc.), analyze the market, trade using various strategies, including scalping, invest in long-term assets, etc.

It also offers a large set of oscillators, the number of which can be expanded, and add new tools to the program. About 80 tools were initially integrated into the program; at the same time, there is a Market where you can buy or download oscillators and indicators for free. In addition, players can create author’s scripts if they have knowledge in the MQL5 language. For example, this powerful trading solution is available from Corsa Capital, Alpari etc.

MetaTrader 5 trading in the terminal

MetaTrader 5 Market

  • TradeSmarter

It is also an interesting program offered by a number of brokerage organizations to customers. It is in demand primarily among professional investors. The program is functional and easy to learn and work in. Increased attention to safety and reliability, ability to analyze assets, work with charts, and choose tools can be noted as its advantages, which allowed it to be included in the range of the best similar products. The terminal is concise, made in a dark design, which allows you to be concentrated only on work. At the same time, even a beginner can quickly learn it.

One of the brokers offering trading in this program is Finmax (website); it is a young but ambitious organization that quickly gained a positive reputation ahead of schedule and constantly takes leading positions in the ratings. In many respects, the reason for its instant success is that it offers trading on TradeSmarter. Although this is the perfect solution for working in the market, there is still a drawback here – there are very few tools for market analysis (for example, oscillators MACD, RSI).

  • TradingView

Every self-respecting trader should know about this «live chart» and the players really will use it to use its advanced features for their own purposes. You can implement here any trading methods and strategies, study the market using huge tools (graphical tools and oscillators). The program is easy to learn, convenient, operates without failures and can offer many tools (including author’s ones) to the players. When starting working here, you can configure the program background, select assets and oscillators (there are both paid and free tools here), use chat. You should that brokers often offer this program for their clients, for instance, INTRADE.BAR, Binary, Migesco etc.).

TradingView trading terminal

 

In which way are indicators used in the broker’s terminal?

INTRADE.BAR

It is easy to get acquainted with the oscillators available in its terminal – they are located at the program bottom, at the same place as the expiration settings, the graph view. By clicking the «Indicators» button, you can examine the available tools. Choosing any of the oscillators, you can immediately configure it to make it convenient to work with it. Then the only thing you should do is to add it to the workspace using the «Build» button. In this case, the chart will look like this:

Binomo: oscillator added to the chart

Binarium

It is also easy and simple to work with oscillators in the trading platform of this company; they are located here on the bottom toolbar. Choosing one of the oscillators available here, it is proposed to immediately configure it. Then it remains only to add a tool to the chart using the «Apply» button and start working. In this case, the working space of the platform will look like this:

Binarium: an oscillator added to the chart

  • ExpertOption

How does this platform work? Everything here is also simple. To study the oscillators available here, you can use the button located for convenience in its workspace:

ExpertOption oscillators in the terminal

By clicking the «Indicators» button, you can study all the tools offered here, including oscillators. By selecting any of the tools here, you can immediately configure it and add it to the chart using the «Indicators» button. After that, the graph will look like this:

ExpertOption chart view after adding an oscillator

  • Finmax

There is also an option of adding market analysis tools to this platform. They are located immediately in the main part of the workspace and, you can select one of the tools by clicking on the «Indicators» button and attach it to the chart.

 

What should you do if the platform does not have correct oscillators?

In fact, this is a common problem that any trader faces today. Using any strategies, he/she often realizes that there are not all tools in his/her broker’s platform. What should you do? You should do everything that all market players – working in standard platforms that contain maximum number of tools. For example, this is a «live chart», Metatrader 4 (or MT5). These powerful platforms are distinguished by availability of a large number of tools, and you can also add new oscillators to the MT4 and MT5 terminals, which greatly expands the players’ capabilities. But it is worth remembering that there is here one «but». Metatrader terminals use quotes from certain liquidity providers: Currenex, LMAX Exchange, FXCM Pro, Integral, Hotspot FX, Alpari, Swissquote, FastMatch. Therefore, to work here you need a broker who works with the same organizations.

 

How to add an oscillator to the MetaTrader 5 chart?

  • Method 1. Through the library.

When starting to work with oscillators in this platform, it is worth checking whether there are any necessary tools in the program itself, because, after installing it, the trader can access a number of already installed oscillators. To do this, you should use the «Oscillators» sections (as well as Volumes, B. Williams, User). Choosing the right one from among these tools, you can immediately add it to the chart and configure it. If it does not appear in these sections, you should take an advantage of other program features:

  • Method 2. Through the «Market».

This section is available at the very bottom of the program and offers a number of interesting capabilities for the player. Here you can download both paid and free programs, and study information about them. The advantage of this solution is that you should not search for tool files on the network and worry about whether this is a correct file, whether it will work correctly, whether it contains dangerous or partner content. By selecting any of the tools and reading its description, you can immediately download it. In this case, the tools are immediately displayed in the «User» folder and are available for work.

MetaTrader 5 trading binary options with oscillators

  • Method 3. Via the Internet.

This method is also popular with players, as there may not be any tool for a specific strategy in the «Market», as well. In this case, you should use the Internet and upload files in a manner familiar to traders – in the program directory:

Having found the file in the «mq5» («ex5») format, we can proceed to further work:

MetaTrader 5 adding an oscillator via the Internet

After downloading it, you should open the program data directory. Then, open the MQL5 – Indicators folder. The oscillator file should be copied to the last folder. And that is all. It has been already added to the program. You should just restart it (close and reopen it), check availability of the tool in the «User» menu item. If everything is OK, you can click on the tool and add it to the chart for further work with it:

MetaTrader 5: binary options trading

 

How can you get signals based on the oscillator?

The search for signals to work on the market is one of the main problems of traders, since productivity depends on their quality and accuracy. Moreover, both the oscillators themselves and entire trading methods can be their source, they are provided by certain companies and brokerage organizations. As exemplified by the Expertoption platform, let’s see how signals are searched using RSI. RSI is one of the most common tools for players, which is simple and understandable in operation, it enables you to get information about overbought/oversold signals and divergences.

Trading options with RSI in the Expertoption platform

  • In case of overbought/oversold signals:

If the RSI is at indicator 70, overbought zone (downward sentiment), you can purchase PUT options:

Expertoption: purchase of binary options PUT

If the RSI is at indicator 30, the oversold zones (upward sentiment), you can purchase CALL options:

Expertoption: purchase of binary options CALL

  • Divergencies:

In case of divergence, the rising price sentiment does not find confirmation from RSI, a contract with an UP value should be drawn up:

Expertoption: buy binary options UP

In case of convergence, the falling sentiment of value does not find confirmation from RSI, a contract with a DOWN value should be drawn up:

Expertoption: buy binary options DOWN

 

Oscillators for Binary Options

Trending ones

  • MACD (Moving convergence/divergence)

This tool is notable that, showing the difference between moving ones, it allows you to use a number of accurate data on the current market sentiment and increase your advantages while working. Like all oscillators, when added to the chart, it is displayed in a separate window, which is convenient for you. This is one of the popular tools that has appeared on Forex and options long ago, it is appreciated for its flexibility and sheer simplicity. When interpreting its data, it is customary to rely on the following logic: when its red line crosses the blue moving, we are talking about growing moods, and when an opposite situation takes place, we are talking about downward sentiments. Green columns are also a tool for work: it enables you to draw conclusions about a trend, about whether it is strong and not, and the general sentiment of the market that will take place.

  • ADX (Average Directional Movement Index)

This tool will also be useful for market players in their work. Its value consists in accurate determination of the market sentiments, as well as in recording changes in these sentiments, strength, and level of volatility, due to which it is often found in strategies where it shows accurate data. It consists of three lines: + DI (this is a moving of a positive sentiment, usually blue), -DI (this is a moving of a negative sentiment, usually red), and ADX itself, which shows the main direction of market sentiment or its absence. It is customary to use it as follows: if its index shows growth, we are talking about strengthening sentiment, if falling – we are talking about weakening sentiment; if there is a strong divergence of movings + DI and -DI, then we can conclude about the growth of sentiments and vice versa – about their weakening.

  • RSI

This tool can be confidently deemed to be one of the most important among the players, regardless of their experience, effectiveness and features of the strategy. It is especially useful: it allows you to accurately know the characteristics of changes in the asset dynamics relative to their previous data. It is connected to work when you should learn about market sentiment, overbought and oversold signals, reversals and emergence of new trends. When added to the main workspace, it is also located in a separate window, which is especially convenient for players. Thus, it is customary to use its following indicators: its line is located above the value of 70, we are talking about overbought assets, when it dropped below 30 – we are talking about oversold assets, when movings fluctuate between 70 and 30 – we see a flat.

  • Ichimoku

It is also one of the interesting and effective tools that are actively used by players in their work. This real «Japanese miracle» consists of several lines, the combination of which will allow you to monitor market sentiment, enter trades on time and significantly increase your account. The reason for its great popularity is simplicity and ease of working with it, but at the same time, a lot of information useful to the trader is offered, which will allow using its data only to get a powerful tool that can provide all the required data on the assets sentiment (trends, support data and resistance, about rollbacks, data on exit or entry into a position).

It can be safely considered an entire trading system, while being simple and understandable. Despite the fact that it consists of five lines, which may seem complicated and illogical, everything is simple here, on the contrary, it should be considered a logical and understandable tool that generates clear signals. It is effective and efficient, due to the fact that it is a separate powerful system, it is actively used by players.

Volatility oscillators

  • Chaikin oscillator

One of the brightest tools of this group, which is very popular among players. Its distinguishing features are its simplicity and convenience. In the work, it relies on data on the difference between the maximum and minimum cost. And although it is not able to track the gap data, in any case this is the tool that should become part of a serious player’s strategy, especially if he/she prefers to trade the short-lived assets. Thanks to the light working principle and accurate signals, it will assist the beginners, as well. It is able to generate information on the volatility, about reversals, the end and change of sentiments in the market. At the same time, when including it in the strategy, it is recommended to connect the trending tools, as well as a confirmation of its information.

  • Average True Range

It is also deemed to be one of the common tools in this group. It is popular with players from different markets due to its operation simplicity and clear generated data, it is often found in trading methods. Like other oscillators, it is located in a separate chart window. Its separate advantage is in determining the points of the greatest peaks of sentiment volatility, which can be actively used during trading. It will be a real assistant to the players not only for accurate determining the volatility level but also for searching data on future price dynamics, while reducing unnecessary noise that would complicate the work. Thus, it is usually interpreted in such a way that, if its values are high, we are talking about increasing sentiments, and, vice versa, the lower the ATR, the weaker the sentiment.

There is also a tool that deserves the players’ attention due to its easy operation, but it offers them market data that can improve performance when used correctly. Its other name is «vivacity index». It is usually used not only as ordinary oscillators, but also as a trend tool that determines the assets status. It is customary to use it as a filter as part of other tools, for example, with RSI. Following the RSI data, it is capable to confirm its data: for example, if the RSI is above 70, then there will soon be a U-turn, you can prepare to purchase DOWN options and, if the RSI is at 30, we can talk about possible purchase of UP contracts. It can also be used when searching for oversold and overbought zones, moments of divergence and convergence, which is also a vivid indicator of a change in market sentiment.

Price speed oscillators

  • Stochastic

Probably, there is no such a player, even among beginners, who would not know about this tool or hear about it. This is one of the most popular tools the players first get to know when starting their work in a particular market. Certainly, all this is possible only thanks to its advantages – its simplicity, as well as the intelligibility of the data generated by it. This is the main work tool capable of providing the trader with a lot of data: about current centiments, about extremes, and about reversals, and about moments for entering/withdrawing from trading. It can be used with different assets and different trading methods.

In many ways, analysing features of the cost speed, it resembles RSI, but at the same time it is much more dynamic than this tool, it is more often located in zones of extremes. For example, it is customary to use it in determining extremes: when overbought (being above the 80 point), a reversal should be expected, which means that it is worth preparing to execute the PUT contracts; in case of oversold (below 20) – you should be prepared to execute the CALL contracts. In case of discrepancies, when the tool data are not confirmed by the cost data, it is also worth looking for moments for a market reversal.

  • Commodity Channel Index

This tool is quite well known to the market players, it is found in different methods and trading systems. Like other oscillators, it is indispensable in searching for extreme zones. It also resembles RSI in many ways. Its line is located within the levels -100 and +100 and, going beyond these limits, it demonstrates oversold and overbought signals, which are the main ones of this tool. Nevertheless, it is more effective as a filter. Using its data, the players usually act as follows: if the line is below -100, then we are talking about an upward sentiment, it is worth executing the UP contracts, if, vice versa, it above +100, we are talking about an upcoming turn and you should execute the DOWN deals. Its capabilities are also widely used in determining convergence/divergence zones.

Volume oscillators

  • Volume Oscillator

Tools in this group track the trends in trading volume. Thus, the Volume Oscillator consists of two lines, their behaviour shows this information: if the fast line is above the slow and the tool is above the 0 point, then we are talking about growing sentiments; if everything occurrs vice versa, then we see the falling sentiments This information allows you to judge about the current trend and to increase their capabilities in work using it. It is also customary to use the signals of crossing the line 0 when this logic applies: when crossing from the bottom up, it is worth buying the UP options, when crossing this point from top to down, it is worth executing the DOWN deal.

  • On Balance Volume

This tool can be used as a trend, but calculation of its data takes into account the data on trading volumes – a serious indicator of the strength and nature of the sentiment of market participants. Its significant advantage is the outstripping nature of the data, which will be a serious advantage for players who use it in their strategy. It is important to note that it is very simple and understandable in work; however, it generates accurate data that will lead the player to increase his/her deposit. It is also located in a separate window, as well as other similar tools showing data on volumes of asset trading. OBV is used to search for a whole series of data: they include breakdowns, and extremes, and reversals, and confirmation of a market sentiment.

Cyclic oscillators

  • MESA Sine Wave Indicator

This tool will be an excellent source for collecting data on market cycles and their features, which allow you to judge availability of certain forces. It can be actively used not only in trends, but also in case of their absence, where it is difficult to see any dominant forces. The advantage of this tool is its easy operating principle; even beginners will cope with it. Using its data, you can see the exact data and, having made the right decision on the asset dynamics, it can positively affect the account size.

  • Fibonacci Time Zones

This tool looks like a series of vertical lines on the chart, which are based on using a sequence of Fibonacci numbers. It serves to determine future reversal zones, and data on the continuation of sentiments. Here, work does not occur with indicators of the value dynamics, but with data on the duration of the period parameter that has passed at the trend end. It is worth remembering that when working with it, you should require one of the trending tools that would confirm its data. The extreme points noted by the player when adding an tool to the chart are important here: start and end points, they will set the interval length.


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