Trend indicators in binary options trading work on a moving average scale. The indicator finds an average price trend for the particular asset, and if the current price is above that average, the asset is in an up-trend. If the price is below the average, the asset is in a down-trend.
CCI stands for Commodity Channel Index. This indicator had shown great success with commodity trading and binary options traders have discovered it also works quite well with various other assets too. The CCI Indicator compares current trading prices with the moving average. The Indicator is great at predicting overbought and oversold assets and predicting a reversal.
It is known as the Relative Strength Index, and is a very popular indicator used by binary options traders. The RSI Indicator basically measures the momentum of an asset by measuring speed and change of prices. On a scale of 1 to 100, the RSI Indicator deems an asset overbought when it is at 70 or above, and oversold when it is at 30 or below.
The Williams Indicator was developed to look back over a time period and determine the relative highs. It is a momentum indicator that allows traders to research the readings and when they show levels of 0 to -20, the asset is considered overbought. When the levels show readings of -80 to -100, the asset is considered oversold. Traders can use these readings to predict abrupt changes in the market.
The Stochastic Oscillator was developed in the 1950’s and has been recognized as a successful measure of asset momentum. The STOCH Indicator is essentially a mirror image of the Williams Indicator. While the Williams Indicator uses momentum on reflective highs, the STOCH Indicator reflects lows using a momentum scale. Generally, both indicators show similar results using opposite sides. Many professionals use them together to wipe out false signals.
MACD stands for Moving Average Convergence Divergence. This sophisticated indicator utilizes a set of 2 moving averages; the 26 day exponential moving average is subtracted from the 12 day exponential moving average. The system then lays a 9 day exponential moving average on top of this procedure which works as the trigger for buy or sell signals.