13 best Pocket Option indicators: How to use them

Indicators are necessary for traders as they help them form better trading decisions according to the market’s condition. Pocket Option allows traders to trade in binary options with some of the best indicators to increase profitability and get a better return on investment.

But what are the best Pocket Option indicators? This article will talk about some examples of indicators used by Pocket Option to earn enormous profit margins by using them.

Also, see our video with the best Pocket Option indicators combination:

#1 RSI

RSI, or Relative Strength Index, denotes the speed and the magnitude of price change so that the trader can figure out the situation of security, whether it is overbought or oversold. This indicator helps figure out the buying and selling potential of an opportunity and find out the security trend.

RSI values lie between 0 to 100, and anything over 70 denotes that the stock is overbought, meaning that you should sell the product while it is popular. However, if the value is below 30, the condition is “oversold,” meaning the potential buying signal is coming, and the trend is reversing.

#2 Stochastic Oscillator

Calculating the level of the price of a security with the recent trading range is done by the Stochastic Oscillator. Two lines in this indicator, known as %K and %D move between values 0 1- 100; however, they never cross one another.

%K shows the price’s current position, and %D shows the area which is based on the price action. For example, if the value is midway, i.e., at value 50, then it means that the trend might reverse as this is an overbought condition. When both lines go below this midpoint, the signal may reverse in the present trend and denote an oversold condition.

#3 CCI

CCI stands for Commodity Channel Index, which Donald Lambert developed, and its function is to determine the momentum of price and the oversold/overbought situation of security. Their values lie between -100 and 100, where values over 100 mean overbought and below means oversold.

This indicator is formed by calculating the average between two moving averages and the current price that lies between 20 to 100 periods. The best time for buying is when CCI is above the 100 value meaning overbought condition when it is almost going to reverse trends.

#4 Bollinger Bands

Bollinger bands are formed by plotting a line in a security price’s upward and downward direction. The area between these lines denotes the average security price, and the area in the width of both bands denotes volatility.

A signal may need to be reversed if the prices move away from the Bollinger band, meaning that they are overextended. Traders on Pocket Option can even use them with other indicators as well to ensure that signals can be confirmed or not. 

#5 Donchian Channel

This indicator was named after the developer Richard Donchian who used this indicator as a measurer of high and low periods in the market. This channel is a trading band that is made of an upper and lower line. This channel can also be used with other indicators, like moving averages or trendlines.

If the prices lay outside the donchian channel, it means that the prices are trending, which can be further used to form sell or buy signals. Similarly, if prices cross the band above, you can buy a signal as the trend continues. However, if the price is below the band, then you must sell as the trend may reverse.

#6 Moving averages

These are the most common indicator used by binary options brokers known as the Moving Averages, which are used to recognize reversals and trends as well. There are so many variations to moving average, such as Simple Moving Average (SMA) and EMA or Exponential Moving Average.

While a simple moving average is calculated by drawing an average between the closing prices of security and the number of periods, EMA calculates the change in current prices in a heavy amount. Therefore, when price movements are above or below the moving averages, it shows that there is an uptrend and a downtrend, respectively.

An uptrend will be denoted when the prices move above the moving average, and you can buy the signals, whereas prices moving below the moving average would show a trend reversal, and it would be better to sell all these orders.

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#7 Fractal

A Japanese trader known as George Lane invented this analysis tool to identify the trends of price movement in the market and the movement patterns for both forex and stock markets.

Fractals form whenever a pattern repeats itself in different time frames. However, to use fractals, you need to recognize their completion and use them with another indicator to get great results, such as moving average, trend lines, etc.; these fractals also form sell or buy signals in the market.

#8 Vortex 

The inventor George lane made this indicator to understand between the oversold and overbought conditions. However, it uses the plotting of lines as a degree of measure. Two lines are plotted where the upper line tells about overbought conditions, whereas the down the line shows oversold conditions.

You can form buy or sell signals when the price moves above or below the lines. Therefore, if the prices move above the line, it means the prices will increase, whereas if the prices move below the lower line, then they will go even lower than the present.

#9 Accelerator Oscillator

This is basically a technical indicator invented by Larry Williams and is used in identifying the overselling and overbuying conditions of stocks and forex in the market. There are two lines in this indicator that represents the speed of the oscillator.

The blue line shows the working of a fast oscillator, whereas the red line represents the oscillator that is slow in speed. This indicator also buys and sells signals. The blue line is the difference between two periods EPA (exponential moving average) and 14 periods of a fast oscillator. However, you can calculate the red line by subtracting the six-period EMA with 34 periods of the slow oscillator.

Prices moving up or down tell about the overbought and oversold conditions in the market. 

#10 Average true range

ATR, or Average True Range, is valuable as it measures the volatility of the prices and can be used to check both forex and stock markets. A single line keeps fluctuating below or above the zero value.

However, whenever the prices fluctuate, ATR becomes high, but they become low whenever prices are stable. Therefore, these indicators are used to look for overbuying or overselling of security.

If ATR is high, that means that the security is overbought and may reverse soon. However, if the value of ATR is low, then that means the security is oversold.

#11 OsMA

OsMA (Oscillator of a Moving Average) is an indicator that is essential for measuring the variation between the signal lines and the momentum of price. This is calculated through the difference between the two lines and further dividing it with the addition of two absolute values (SUM ABS).

This indicator is used whenever an extreme value needs to be predicted in high or low values. Zero is the main balance point; if the value goes up means an uptrend, whereas below zero value means a downtrend.

#12 Momentum indicator

This indicator is especially used to determine the magnitude and speed of the movement of security prices. This can be calculated by dividing the closing price currently with the previous closing price.

If you get 100 as a value, then the security is uptrending, whereas if the value is below 100, then the security is downtrending. This indicator is yet another indicator that is used to purchase or sell the signals when the security’s value reaches any extreme.

#13 Price rate of change

This indicator measures the momentum of price by evaluating the asset’s closing price, dividing it by yesterday’s high value, and further subtracting the one-day low value.

If you receive a positive result, it shows that the security is up trending, whereas a negative result would show that it is a downtrend. The Price Rate of Change indicator is usually used to buy and sell the market signals when the value price is at extreme values. For example, if the PRC is zero, there is an uptrend, whereas if the PRC line is below the zero mark, it is a sell signal.

Conclusion: Pocket Option indicators can be used on the brokers platform for more profits

Indicators are important drawing tools for trading to make maximum profit, and Pocket Option is one of the binary options brokers that provides these tools on the platform for free. Each indicator has its own advantage and usage, so you can use them and experiment on a Pocket Option demo account to see which one works the best.

However, do not forget that tools are not the only thing that can help you win a trade. You have to be tactful while using these tools in the market and must have a thorough knowledge of the price. Moreover, if you add an analysis of your own, then it will be even better.