The best 13 Deriv trading indicators listed:


The best Deriv indicators

Trading indicators are the most used tools in technical analysis and developed to give the trade a better understanding of the market. If you are a trader on Deriv, you can use more than 100 of different indicators. So now the question is, which one is the best? In the following, we compared the best 13 indicators on Deriv, and we will tell you how to use them!

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#1 Relative Strength Index (RSI)

The relative strength index indicator (RSI) on Deriv
The relative strength index indicator (RSI) on Deriv

The RSI is a momentum indicator that compares the number of latest gains to the latest losses within a given period to predict oversold and overbought conditions in a security. Several more than 70 indicate overbought levels, while a value of less than 30 indicates oversold levels.

Individual stocks benefit from RSI more than indexes because stocks have more overbought and oversold situations than indexes. Based on RSI, options on extremely liquid, high-beta stocks are the best picks for short-period trading.

#2 Fibonacci Retracement

Fibonacci indicators on the DerivX trading platform
Fibonacci indicators on the DerivX trading platform

Another amazing indicator that indicates the market’s precise direction is Fibonacci or the golden ratio of roughly 1.618.

Some forex traders utilize this tool to spot profit-making opportunities and reversals. After the market has completed a major up or down move and looks to have leveled out at a certain price level, Fibonacci levels are determined.

Fibonacci retracement levels identify areas where markets can retrace before reverting to the trend established by the initial price action.

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#3 Bollinger Bands

The bollinger bands indicator on Deriv
The bollinger bands indicator on Deriv

Volatility is important to all options traders, and Bollinger bands are a common strategy to gauge volatility. The bands broaden as fluctuations increase and shrink when fluctuation declines. The nearer the strike price comes to the top band, the more it is overbought, and the nearer it comes to the bottom band, the more it is oversold.

A movement in price outside the bands can indicate that the asset is due for a reversal, and options traders can take advantage of this. For example, a trader might start a long put or even short call position after the breakout just above the top band. A breakout that is below the lower band, on the other hand, could be an opportunity to deploy a short put or long call strategy.

Also, keep in mind that selling options during times of turmoil (high volatility), when the option prices are high, and buying options during times of low volatility, when the options are cheaper, makes sense.

#4 Stochastic indicator

The stochastic momentum index indicator on Deriv
The stochastic momentum index indicator on Deriv

This is a prominent trading indicator for determining volatility and oversold or overbought areas.

The stochastic oscillator is used in forex trading to identify trends likely to reverse. A stochastic indicator can determine the momentum by contrasting the closing price and the trading range over a given period.

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#5 Parabolic SAR

The Parabolic SAR indicator on the Deriv MetaTrader 5
The Parabolic SAR indicator on the Deriv MetaTrader 5 (DMT5)

The parabolic SAR indicates the competitive landscape of a currency pair. The general trend is bullish if the price is above the parabolic SAR. If somehow the price is well below the SAR, however, the general trend is negative.

Traders utilize this signal to predict the trend’s course. A potential entry point is also provided by a market rejection from the parabolic SAR signal.

#6 Intraday Momentum Index (IMI)

The intraday momentum index indicator on Deriv
The intraday momentum index indicator on the DMT5 platform

The Intraday Momentum Index is an excellent technical indicator for high-frequency option traders who want to wager on intraday moves. It combines intraday candlesticks and RSI concepts to provide an appropriate range (similar to the RSI) for intraday trading by identifying oversold and overbought levels. IMI is used by options traders to detect chances to place bullish trades in an up-trending market at an intraday price jump or a bearish order in a down-trending market at an intraday price nudge.

To calculate the IMI, divide the total number of up days by the total number of up days plus the total number of down days, or even IS up (IS up + IS down), and multiply by 100. While the trader can look at days, the most common timescale is 14 days. The stock is overbought if the result is greater than 70, just like the RSI. If the result is lower than 30, the asset is oversold.

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#7 Donchian channels

This indicator determines the greater and lower price action values, which assists various forex traders in grasping the market’s volatility.

Donchian channels are composed of 3 different lines produced by moving average calculations.

Around the median one, there are upper and lower bands. The area between the top and the bottom bands is known as the Donchian channel.

#8 Money Flow Index (MFI)

The money flow index (MFI) indicator on the Deriv MetaTrader 5
The money flow index (MFI) indicator on the Deriv MetaTrader 5

The Money Flow Index combines volume data and price to create a momentum indicator. The volume-weighted RSI is the other name for it. MFI is a “trading pressure” indicator that measures the outflow and inflow of funds into an instrument over a specified time period (generally 14 days). A rating of more than 80 suggests overbought security, while a reading of under 20 indicates oversold security.

Because of its dependence on volume data, MFI is more fitted to stock-centered options trading (instead of index-based) and longer-term deals. It can indicate a trend change when the MFI moves contrary to the stock price.

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#9 Moving Average (MA)

The moving average indicator on the Deriv DTrader
The moving average indicator on the Deriv DTrader

The MA is a crucial forex indicator that displays the average price value within a set period.

Buyers regulate the price if the value trades are beyond the moving average, and sellers if the value trades are substantially below the moving average.

As a result, a trader’s trading strategy should concentrate on buying transactions if the value is well above the moving average. Every investor should be acquainted with the moving average as a significant trading indicator.

#10 Put-Call Ratio (PCR) indicator

The Put-Call Ratio (PCR) indicator
The Put-Call Ratio (PCR) indicator

This ratio reflects put and call option trading volumes. Instead of its absolute magnitude, fluctuations in the put-call ratio imply a shift in market sentiment.

Bearishness is indicated when the ratio of the puts to the calls is larger than one. The ratio is below one when call volume surpasses put volume by greater than one, indicating bullishness. On the other hand, the put-call ratio is seen as a contrarian indicator by traders.

#11 Open Interest (OI)

The open interest indicator

This indicator in options represents unsettled or open positions. Although the OI may not necessarily indicate a clear downtrend or uptrend, it provides information about the pattern’s strength. Higher open interest suggests a fresh inflow of funds and, as a result, the continuance of the current trend, whereas dropping OI signals a deteriorating pattern.

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#12 Pivot Point

Pivot points indicator
Pivot points indicator

Pivot points depict the quantity of demand and supply for a currency pair at its equilibrium. Whenever a price hits the pivot level, the market forces for that particular pair are identical.

When the price of a currency pair rises above the pivot point, it indicates considerable demand for it. Conversely, if the price goes down beyond the pivot level, supply will be abundant.

Pricing in the financial market tends to wander around the equilibrium point before taking any direction. As a result, the rejection of the pivot point signals a possible trade entry for this trading indicator. 

#13 Average True Range (ATR)

The average true range (ATR) indicator on the Deriv MetaTrader 5
The average true range (ATR) indicator on the Deriv MetaTrader 5

This is used to gauge market volatility. The range refers to the difference between periodic highs and lows, which is the most important component of this indicator.

The range can be used for any trading period, including intraday and multiday. The true range is employed in the Average True Range.

The most crucial of the three measures is true range:

  1. The present (current) high-to-low cycle
  2. Previous time around current high
  3. A period before the current low point

The true range is the biggest of the 3 ranges’ absolute values. The ATR is the moving average of individual ATR.

Conclusion – Deriv offers many helpful indicators

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There are hundreds of different technical indicators on Deriv.com that may be utilized for trading options in addition to the ones described above (such as true average range, stochastic oscillators, and cumulative tick). Variations with smoothing techniques on resulting values, averaging principles, and numerous indicators exist on top. After carefully reviewing the mathematical dependencies and computations, an options trader should choose the best indicators for their trading style and technique.

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About the author

Marc Van Sittert
Marc Van Sittert is an experienced Binary Options Trader and coach who is originally from South Africa. He started his career in 2014 by trading old-school Binary Options online. His main focus is on short-term contracts with 60-second trades.

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