Pocket Option Risk Management

Are you struggling with constant binary options losses Pocket Option Best Trader ? Are you using a demo trading account to practice but do not get the desired fruit ? If your answer is in affirmation to these questions, you are probably doing something wrong.

A trader trades binary options to reap quick profits. However, he ends up with losses because of his failure to analyze the market trends. Binary options trading indicators can be your escape from this problem.

Table of contents:

Introduction Pocket Option Risk Management

Beginners and advanced traders can use these technical indicators before placing their next trade.

#1 Alligator

The brainchild of Bill Williams, the alligator, is one of the most used indicators. Bill Williams was one of the most popular and reputed traders.

This binary options indicator follows the smoothed moving averages. For instance, you can find three moving averages on this indicator. These are set commonly at five, eight, and thirteen periods.

These Fibonacci numbers are popularly known as the alligator’s jaw, teeth, and lips. The below points summarize how to use this indicator:

• You can use the convergence and divergence relations with this indicator. You can also club it with other technical indicators to know about the highs and lows in the market.
• A faster movement will indicate positive opportunities on this binary options indicator.

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#2 Moving average

Another top indicator all traders use is the moving average. Moving average is a perfect indicator to know the movement in an asset’s price.

This trading indicator helps traders eliminate the effect of short-term fluctuations. These random ups and down are generally not relevant to your trading decisions.

You can use this binary options indicator individually. You also have the option to club it with other trading indicators.

Some basic information for the moving average is as follows:

• The horizontal movement on this indicator for a prolonged period indicates the price range. Basically, if you see this horizontal line at any angle for the long term, you can easily judge that the price is not trending but ranging.
• The upward moving angle indicates the price rise and an upward trend.
• You can access the market by setting this indicator for the period you wish to access.

However, there is only one drawback of the moving average indicator. A trader cannot comprehend the asset’s accurate price. It is one limitation that binary options traders face using this indicator.

#3 Average true range

A trader can get his hands on ATR or average true indicator to make accurate predictions. Binary options trading happens under highly-volatile market conditions. This indicator can help you observe those conditions easily.

The true average range generally uses historical data to simplify the analysis. Many traders use the 14-day range as a set rule. However, you can alter the period to know the desired range.

ATR is one of the best binary options indicators to let you know when to enter or exit trades. All traders earn profits on binary options trading because they know the accurate time to trade.

The below information will help you in studying this indicator:

• If the ATR shows a low value, it indicates low volatility.
• High volatility gets depicted with its high value.

Binary options traders can use other technical indicators with the ATR. ATR alone cannot be much useful for giving the best information. However, clubbing it with other technical indicators betters your chances of earning through trading.

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#4 Awesome oscillator (AO)

The awesome oscillator indicator is the best to know whether the asset is strong or weak. Many traders feel confused about picking up an underlying asset for binary options trading. If you relate to this situation, this indicator can help you pick one.

The AO indicator analyzes the asset’s momentum. It compares the current momentum with the one that generally prevails.

Most momentum indicators are weak. However, the AO indicator makes accurate calculations to remove any such weaknesses.

To read the AO indicator:

• A value above zero shall indicate an upward trend.
• If the value on the oscillator is below zero, it shows a downward market trend.

All leading online trading platforms, including Quotex, offer this trading indicator. Traders can use it to know the relevant market fluctuations. Accordingly, they can make the perfect binary options trading decision.

#5 Average directional index (ADX)

The average directional index or ADX is yet another binary options indicator. This indicator is the best suited to know the strength of the market trends.

ADX allows its users to make a trading decision that involves minimum risks. It indicates the trends knowing which can enhance your profit-earning potential.

You can use ADX to predict a strong trend as it is easy to use. The average directional index shows you the movement based on the moving averages. All beginners and advanced traders can use this trading indicator, plotted on a single line.

To use this trading indicator, a trader should know the following things:

• The average directional index value falls between 0 to 100.
• A numerical value lower than 30 indicates a weak trend.
• If ADX shows a value higher than 70, indicating a strong market trend.

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#6 Stochastic oscillator

Many traders believe that knowing about the overbuying or overselling conditions can be helpful. Well, if you need a trading indicator for that purpose, this is it.

A stochastic oscillator is one of the top choices of traders. It is available on all online trading platforms, including Quotex.

The stochastic oscillator has its basis in the momentum price changes. Unlike other binary options indicators, it does not follow the actual price.

Most binary options traders use a 14-day period to judge the trends using this indicator. However, it is not a hard-and-fast rule for every trader to pick a 14-day duration. You can set a time frame based on your binary options trade expiry.

Using the stochastic oscillator is straightforward.

Only a few things that you need to know about this binary options indicator:

• %K and %D form the two metrics of the stochastic oscillator.
• When these two metrics crossover, it is a clear indication for you to enter the trade.
• You can also know the overbuying or overselling conditions with this indicator.
• A reading above 80 signals an overbought market. In contrast, a reading lower than 20 tells you about the oversold market.

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#7 Moving average convergence divergence (MACD)

Moving averages are very significant binary options trading indicators. You can combine these with almost all other trading indicators.

The moving average convergence divergence indicator merges the market trends with price momentum.

Knowing how to read the results is crucial to using this indicator:

• When MACD is above zero, you can witness an increasing/upward trend.
• If the MACD band is below zero for a prolonged period, it shows a downward trend.

Traders use MACD to decide when to enter or exit the market. Usually, when the MACD band is above zero, it is a positive sign to place your trade. You can use this technical indicator as a trading signal also.

#8 Relative strength index (RSI)

The relative strength index is similar to the MACD. However, it shows results on a scale of 0 to 100, making it different than MACD.

It is an oscillating indicator to help identify the overbought and oversold market conditions. RSI has been a part of a trader’s technical analysis for a century now.

It depicts the resistance and the support levels in the market. This binary options indicator also judges the direction of the price movement.

A trader can infer the following things from this indicator:

• A reading above 70 tells about the overbought market conditions.
• If the technical analysis indicates a reading below 30, it signals an oversold market.

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#9 Bollinger bands

Our discussion would not be complete without the mention of Bollinger bands. Many traders put this easy-to-use binary options indicator in use.

You can know about the price range of an asset using this indicator. Bollinger bands deliver the results using a band. The width of the band helps a trader know about the high or low volatility.

Inferring Bollinger bands is straightforward:

• If the bands appear narrow or closer, it signals low volatility.
• A higher Bollinger band’s width signals higher market volatility.

It is one of the best trading tools to determine when an asset is trading outside its usual value. All online trading platforms provide it since it is a popular trading indicator.

You can sign up with Quotex to trade binary options using Bollinger bands. You can predict the long-term price movement essential to building your trading strategy.

Determining overbuying and overselling is easy with Bollinger bands:

• A movement above the band’s upper parameters indicates overbought market conditions.
• Price movement below the lower band shows the oversold market conditions.

#10 Standard deviation

Standard deviation is a crucial tool to determine the size of price changes. Standard deviation is helpful for many things, including binary options trading.

Traders use standard deviation to know the effect of volatility on asset prices. This binary options indicator uses mathematical calculations to predict the effect of volatility. However, it cannot help you know whether an asset might see an upward trend or a downward one.

One can compare the underlying asset’s current price with its historical price with standard deviation. Traders on all platforms can use this binary options indicator. You can use it even while trading options on Quotex.

A trader can maximize his profit-earning potential by using these trading indicators. Beginners can make it a practice to use these. Binary options trading does involve a lot of risks. However, you can minimize this risk by availing of the benefits offered by trading indicators.

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Added advantages of Binary Options trading indicators

Let us read some of the advantages traders witnesses while using these technical indicators.

• The price action movement identification becomes simplified with their use. A trader can easily determine the direction in which an asset’s price moves. He can also infer the resistance and support levels in the market with their use.
• Binary options technical indicators can help the traders pick a time to enter or exit a trade. You can learn or spot the weak market conditions and vice versa.
• Reading and analyzing the price charts gets easier by applying some trading indicators. They also serve as a warning signal for the things you cannot see on the price chart.
• Trading indicators might not help you eliminate losses. However, they might help you lower your losses, provided you use them accurately.

What are Binary Options indicators?

Most traders know about the binary options indicators and use them to strategize their moves. However, most beginners rely on outside information to make their trading decisions.

Using trading indicators is not even on their to-do list for researching the market. Clearly, these users don’t know anything about these powerful trading tools called indicators.

Trading indicators are nothing but technical tools that allow you into the market perspective. Whether you wish to know the ups and downs in the price or make predictions, trading indicators are all you need.

Online trading platforms allow users to use the indicators for technical analysis. The leading brokers like Quotex offer numerous indicators to their users. A binary options trader can experience several benefits of using the technical indicators. You can conduct thorough market analysis with the help of these tools.

They show you the result of the price charts and help you make predictions. If you can read accurately, you are sure to earn profits on trades you place.

We have accustomed you to the meaning and importance of trading indicators. Let us now tour you through the ten best trading indicators for binary options trading.

Conclusion

Binary options trading is slowly taking over the minds of all traders. It owes to the ease of placing trades and the ability to earn money quickly.

The traders can make immense profits and get rich with binary options trading. However, it is possible only when a trader plans his moves in advance. He should also know the right time to enter or exit the trade.

Binary Options trading indicators help the trader know all these things. They manifold the chances of making accurate predictions. Therefore, a trader should make technical indicators a part of his regular trading strategy.

You can also club these trading indicators with other tools for better decision-making.

(Risk warning: your capital can be at risk)