Technical indicators are very crucial for traders to strategize their trading decisions. Learning about these indicators and knowing how to use them can benefit you in trading. You can use a couple of these trading indicators to find the one that will work the best for you.
Though Binomo has many trading tools and technical instruments, we will talk about the five best indicators on the platform. These five indicators help you predict the trends to enable you to forecast accurately and earn profits trading online.
You can see a brief description of the five best indicators on Binomo below.
The moving average is the most famous trading indicator. Both beginners and professionals can use this indicator to analyze market trends. Almost all trading platforms have this indicator, and Binomo is no different.
Moving average performs the technical analysis by adding all the values of a particular period. After adding these values, the resultant gets divided by the number of periods or days. It is nothing but just the average of all the values we consider while conducting a technical analysis.
You can determine the stock’s price over a period using the moving average indicator. For example, if you wish to discover the stock’s average price for ten days, this indicator will add the stock values for ten days and divide the sum by 10.
This indicator usually considers the stock’s closing price. Many traders use the moving average to determine the direction of the trend. Moving Average is also beneficial in helping you identify support and resistance levels.
This indicator drives out the confusion created because of the fluctuation in the prices. Since it is an average price of the stock, it will move according to the changes in average.
When you find out the relationship between a security’s price moving average and the price, you will be able to interpret a moving average. You can use this technical indicator to discover trends in indexes and stocks. These are also beneficial in formulating entry and exit strategies.
By combining the moving average with other indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), you can identify the buy and sell signals appropriately and timely.
You can use this indicator to make a big difference in your trading strategies. It can help you witness some positive outcomes of your trading decisions.
Exponential moving average
The EMA is one of the Moving Average indicators. We place great significance on the past data points in the Moving Average.
On the other hand, in the Exponential Moving Average, or EMA, we attribute a higher weightage to the recent data points. When we consider the most recent data point, our data gets more accurate and responsive to determine the trends or new information.
Using this indicator, you can validate the crucial changes and movements in the market. You can also determine their legitimacy through a technical analysis conducted by the EMA.
Most traders use the 12 days or 26 days Exponential Moving Average indicator if they need to discover the price average for a short term. On the contrary, to determine long-term trends, traders generally use the 50 or 200 days indicator to help them plan their long-term moves.
Moving average convergence divergence
Another famous indicator on Binomo is the Moving Average Convergence Divergence, also called MACD. This indicator will help you discover the price momentum by comparing the two Moving Averages discussed above.
The convergence in this indicator stands for the coinciding of the two averages. On the other hand, the divergence means that the moving averages are taking different paths.
The convergence of the Moving Average signals a decreasing momentum, while the divergence of the Moving Averages signals an increase in momentum.
A trader can forecast a bullish trend if the short-term average rises above long-term averages. Opposing this, there is a bearish trend in the market if the short-term average is below the long-term average.
You can view the results of these indicators on a candlestick graph and line charts.
A stochastic Oscillator helps you determine the momentum of the asset’s price. This range-bound indicator helps measure the price’s location over a period.
The Stochastic Oscillator finds the difference between the financial asset’s highest and lowest price and then divides the result by 2. After deducting one from the result, you will be able to see two lines on the graph.
The range of the Stochastic Oscillator lies between 0 to 100. This range helps you identify the oversold or overbought conditions.
If the Stochastic Oscillator graph shows you reading above 80, it generally signals an overbought condition. On the other hand, a reading lower than 20 signals oversold conditions.
You can find two lines on this indicator. One of these lines shows the actual value of the Oscillator. The other line depicts the asset’s simple moving average for three days. This indicator works on the principle that the price follows the momentum. When the two lines intersect, it signals the reversal of operation.
Almost all online trading platforms have a Stochastic Oscillator indicator in their charting tools. This indicator uses 14 days, which you can adjust according to your requirements. You can rely on this indicator to formulate your trading strategies as long as you predict accurate results. If you come up with an adept forecast, you can win your trades. A trader can consider the price trends on this indicator as a filter to determine the signal if they are in the same direction as the market trend.
If you wish to assess the degree to which the market might take an opposite turn compared to its current trends, Fibonacci Retracement will do the job.
This technical analysis indicator helps you confirm if the market is about to pull back or take a temporary dip. It is crucial in helping the traders determine the support and resistance levels.
If a trader thinks that the market is above to move in an opposite direction, they use the Fibonacci Retracement to ensure this. Once they confirm it, it becomes easy to use the stop and limit options and close their trades. Consequently, they can protect themselves from incurring huge losses. Many advanced users make use of the Fibonacci Retracement to conduct technical analysis.
One of the most loved technical analysis trading indicators is the Bollinger Bands. This indicator provides information about the usual price at which the asset generally trades.
The volatility of the asset will cause the width of the bands to increase or decrease. If the Bollinger Bands are closer, the asset is less volatile. On the contrary, if the gap between them is too much, the asset has high volatility.
This indicator will help in determining whether the asset is trading at its usual price. As a result, you can identify the long-term price movements in the market. If you witness the asset’s price rising above the upper parameters of the band, you can conclude that it is overbought. If the price falls below the lower parameters of the band, the asset is oversold.
Relative strength index
The Relative Strength Index is highly beneficial in determining momentum. You can use the RSI to identify the market conditions. It is a best-suited indicator for determining the price movements that can cause you heavy losses.
The range of the Relative Strength Index falls between 0 to 100. If you find that an asset’s range is 70 or above, it signals the overbuying of the asset. A score of 30 or below on the Relative Strength Index tells us about the overselling of the asset.
The Relative Strength Index is highly efficient in helping you know about the maturity of your short-term gains. If this index signals overbuying of the asset, you should take it for the fact that your short-term gains on that asset might be reaching a point of maturity.
While the overselling of the asset on this index shows that a trader’s declines in the short-run might be reaching their maturity point. A trader should always consider the trends as they tend to change continuously.
Why are trading indicators important?
Using trading indicators simplifies your trading moves. With trading indicators, you can monitor the asset’s price movements. Combining two or more technical indicators can help make an accurate forecast. You can improve your trading strategies using these indicators. Binomo offers you a couple of technical indicators to help you understand the market performance and the underlying reasons for the changes.
Conclusion – There are various trading indicators on Binomo
Regardless of whether you are trading forex, commodities, crypto, stocks, or binary options, you will need some technical indicators. They will help you make predictions and take the right step in trading.
Usually, beginners do not realize the importance of using trading indicators and consequently suffer losses because they can’t make the right forecast.
These Binomo indicators help traders study the trends and track price movements. You can activate any indicator of your preference and use it for technical analysis. These technical and mathematical calculations help you generate signals beneficial for your trades.
If you wish to enhance your trading game and earn money on Binomo, you should learn more about these indicators and how to use them.