www.bbinary.com | Improving Binary Options Trading Performance by Using Indicators

May 16, 2011 - PRLog -- Many binary options traders use technical analysis to predict future movement based on an examination of historical data. This often involves employing mathematical tools to determine values calculated from previous price data. These values are known as ‘lagging indicators’ and are of two main types: trend indicators and oscillators.

In order to be able to employ these tools to produce the required analysis, you need access to data that is comprehensive, updated frequently and readily available. Banc De Binary publishes real-time prices on its website (www.bbinary.com) so that its customers always have the latest information.

Identifying Trends

The most common type of trend identifier is a moving average that is applied to a price chart. The chart is overlaid with a moving average line that shows the market’s trend by smoothing the data.

Most traders use simple moving averages where each point on the moving average line is calculated by taking the average closing prices for a set number of prior periods. Hence, it is a ‘lagging indicator’ because it is largely based on periods before the current one. A new average is calculated every period so that the trend line is constantly updated. Some traders use exponential moving averages rather than simple ones, giving more weight to recent data when calculating each new average point.

Riding the Wave

The second main type of indicator is an oscillator, which is normally plotted below a chart’s price data. Different sub-types are available, such as momentum, moving average convergence divergence and stochastics. The oscillating line will also lag slightly behind current prices and will move up and down in a wave shape as prices change.

Each oscillator chart has ‘overbought’ and ‘oversold’ zones and traders often interpret a crossover from one zone to another as a trading signal. When the line moves into the overbought zone, they anticipate that the market price is due to fall while a movement into oversold suggest a rise in price is likely.

By studying the lines on the chart, binary options traders know whether a call or put option is most likely to succeed.

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Banc De Binary is a leading global provider of Binary Option Trading Technology (BOT) and financial services and solutions with specialized expertise in online option trading and brokerage firm; Banc De Binary delivers its portfolio of services and solutions using a global delivery model combining offshore, near-shore and local teams.

Banc De Binary provides services to clients in over 80 countries in the private, commercial, financial and banking sectors, using a highly skilled workforce of experienced IT employees and financial consulting professionals (brokers) across several key vertical markets. The primary industries, or verticals, which Banc De Binary serves include online brokerage firms, private banking institutions and international financial services.