If you are looking for a way to fast-track your career in binary options trading, then perhaps you should check out popular broker BinaryBook, which puts at the disposal of all interested binary options brokers an innovative tool called the BinaryBook Trend Analyzer. The Trend Analyzer is indeed loaded with smart trading capabilities that are bound to render the trading experience, especially of rookie binary options traders much more simple and profitable.
Using the Trend Analyzer offers distinct benefits to binary options traders since:
Available on the classic binary options trading offered by BinaryBook, the Trend Analyzer makes good use of three proven and reliable trading techniques known as the Relative Strength Indicator (RSI), the Simple Moving Average (SMA) and the Bollinger Bands (BB) in order to calculate the behaviour of an asset. These three trading techniques are further explained below:
Relative Strength Index (RSI) Indicator
Known as a momentum oscillator, the Relative Strength Index Indicator is used to compare the extent of gains and losses in order to calculate the overbought/oversold position of a certain asset. The range of the RSI lies from 0 to 100, but the main references used to estimate the current position lies within 70 and 30. For instance, if the RSI indicator of an asset drops below 30, that asset is considered to be in an overbought position. Likewise, if it reaches above 70, the asset is said to be in an oversold position. By recognising these extreme conditions, traders can then place several successful short-term trades in the binary options industry.
Simple Moving Average (SMA)
The SMA is a trending indicator which eliminates the volatility of daily price movement by smoothing it out into a line that is plotted on top of the price movement of a security. In other words, it is generally used to remove excess data from random price fluctuations. The SMA can be calculated by adding up the last “X” period’s closing prices before dividing that number by X. For example, if you were to plot a 5-period simple moving average on a 10-minute currency chart, you would add up the closing prices of the last 50 minutes before dividing that number by 5. While short-term averages tend to react quickly as opposed to the slow reaction time of long-term averages, many traders like to wait for the crossover period in order to signal a possible uptrend on the chart.
Bollinger Bands (BB)
Developed by and named after John Bollinger, the Bollinger Bands are essentially two bands placed above and below a moving average. Here, volatility is based on standard deviation. When the volatility of an asset increases, the bands automatically expand. When the volatility decreases, the bands contract. The closer the prices are to the upper band, the more overbought the market is. The closer the prices are to the lower band, the more oversold the market it. As such, Bollinger Bands can be used to predict trend reversals in order to indicate to traders when to enter or exit a market.
How to use the Trend Analyzer?
The BinaryBook Trend Analyzer is a user-friendly tool which makes things easier for traders by automatically calculating the behaviour of an asset. In order to be able to benefit from its capabilities, traders will first need to open a trading account with BinaryBook and then simply to:
-Click on the “Magic Wand” symbol that is easily located on the fluid BinaryBook platform
-Choose which of the three reliable trading strategies they want to use
-Follow the prediction made by the Trend Analyzer
Building a successful trading career could potentially become much easier and more likely for those binary options traders who will decide to take advantage of the refreshing, innovative and useful capabilities offered by BinaryBook’s Trend Analyzer.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.