## Binary Options Indicators: Which ones to use?

A website called **best meta trader indicators** has published the results of a public poll. This poll’s question was: „*What’s your favorite forex indicator?*“ and it’s had more than a **few thousand replies**! That is quite a big number!

The results are pretty interesting and surprising (for me at least) and we will talk about it in today’s article. So get ready and let’s get straight into it.

### Forex OR Binary Options indicators?

This website is mainly about binary options and their strategies, and this **article** and **poll** are about forex – that’s true. Both are two different things, however they follow the same principles.

Is the price going to go UP or DOWN?

That’s why we can use the same indicators in **forex** and **binary options**.

### Download these binary options indicators for MT4

Most of these indicators are already installed in MT4 by default. But just to make sure, I have uploaded them for you. You can download them from the link below.

The most favorite binary options indicators.rar ►**Download**

### The most favorite binary options indicator

According to the result’s of the poll, the most favorite binary options indicator is, with 5385 votes, the **MACD** (Moving Average Convergence Divergence.) This comes as a little surprise, as my personal guess was the the most favorite would be Moving Average or Bollinger Bands.

The full results can be found below. First comes the indicator’s name, the number in the brackets is the amount of votes received in the poll:

- MACD (5,385)
- RSI (4,310)
- Bollinger Bands (4,126)
- Moving Average (3,967)
- Stochastic Oscillator (3,523)
- Fibonacci Retracements (3,348)
- Other (2,574)
- Supertrend (2,487)
- Ichimoku Kinko Hyo (2,484)
- CCI (1,988)
- Parabolic SAR (1,393)
- Trix (1,065)
- Donchian Channel (969)
- Williams %R (920)
- Keltner Channel (895)
- Momentum (772)
- On-balance volume (568)
- Envelopes (500)

### Strategies with these indicators

Many strategies published on this website are using one or more of these favorite indicators. You can find a few of them below.

### Binary Options Fibonacci Strategy

The fibonacci retracement tool is probably the least understood, especially among the new traders. They hardly realize about the importance of having this tool by their side in order to take their trading to the next level. Retracements are one of the most prominent elements of any uptrend; therefore developing a trading strategy around this phenomenon

### Binary Options ‘3’ Strategy That Works + Video

While we go haywire finding a reliable trading system, we tend to miss out on the obvious. Three indicators strategy ensures high potential profits as it produces exact entry signals confirmed by **3 indicators**. Moreover, it can be used with all sorts of currency pairs. This strategy that works is based on three of the most popular indicators – RSI, MA, Stochastic

### BBand Stop binary option strategy

BBand Stop Strategy is a 5 minute binary option trade strategy which uses BBand Stop alert indicator in MT4 to define ideal position to enter the trade. This indicator is used along with the **Bollinger Bands**. How to setup the chart Timeframe: M5 Template: BBand Stop Strategy (Download here: eDisk or UlozTo.Net) How does this strategy work Arrows (pointing up and down) will be displayed over/under

### Golden Eye – Trading strategy with 80 % success rate

Golden Eye is a strategy based on the **ADX indicator** (what is an ADX indicator?) which is used for confirming rebounds. This strategy works well with with M15 timeframe and the trades which are opened for 60 minutes (in direction of longterm trend) or for 30 minutes (against the trend).

I have had a pretty nice profit with this strategy.

I hope I have helped you, good luck with trading!

## The Most Important Technical Indicators For Binary Options

**Consider the following bets:**

*Pay $45 to bet gold will be above $1,700 at 1:30 p.m. today. Get $100 ($55 profit) if you win, lose $45 otherwise.**Receive $81 now to bet that the NASDAQ 100 will go below 8600 points at 2 p.m. today. Keep a profit of $81 if your prediction comes true. If it does not, lose $19.**Pay $77 to win $100 if the USD-JPY forex rate goes above 108 at 3 p.m. today; you lose $77 if it does not.*

Welcome to binary options. All or nothing, one or zero, these securities are available on Nadex. Binary options allow traders to make time-bound conditional bets on predefined values of stock indices, forex, commodities and events. Like a standard exchange-traded option, each binary option has an option premium ($45, $81 and $77 in the examples above), a pre-determined strike price ($1,700, 8600 points and 108 yen), and an expiry (1:30 p.m., 2 p.m., 3 p.m. today).

The differentiator is the settlement price that remains fixed at $0 or $100, depending on the option condition being fulfilled. It keeps the net profit (or loss) fixed. The option premium also remains between $0 and $100. (Related: Guide to trading binary options)

## Calculating Probability

Since binary options are time-bound and condition-based, probability calculations play an important part in valuing these options. It all boils down to “*What is the probability that the current gold price of $1,220 will move to $1,250 or above in the next four hours?”* The determining factors include:

- Volatility (how much and is it sufficient to cross the threshold/strike price?)
- The direction of the price move
- Timing

Technical indicators suitable for binary options trading should incorporate the above factors. One can take a binary option position based on spotting continued momentum or trend reversal patterns. Let’s look at some of the popular binary option technical indicators:

**Wilder’s Directional Movement Indicators (DMI) Average Directional Index (ADX):**Composed of three lines, namely ADX, DI+, and DI-, and their relative positions, this indicator aims to capture the strength of an already identified trend. Here is the table for interpreting the trends:

**Position**

**Momentum**

**ADX Value > 25**

**ADX Value**

İkili seçim brokerlərinin reytinqi:

Here is an illustration, using 3M Company (MMM) stock:

*Image courtesy StockCharts.com*

Depending upon the identified momentum and trend strength, an appropriate buy/sell position could be taken.

**Pivot Point**(in conjunction with support and resistance levels): Pivot point analysis helps determine trends and directions for any given timeframe. Because of the flexibility in timing, pivot points can be used for binary options, particularly for trading highly liquid major currencies. A good example (with calculation and graphs) is included in the article Using Pivot Points in Forex Trading.**Commodity Channel Index (CCI):**The CCI calculates the current price level of a security relative to the average price during any given timeframe. The average price level is usually the moving average. Time periods can be selected as desired, allowing the trader flexibility in choosing when a binary option expires. The CCI is useful in identifying new trends and extreme conditions of overbought/oversold securities. It is very popular among day traders for short-term trading and may be used with additional indicators such as oscillators. In the below formula “price” is the asset’s current price, “MA” is the moving average of the asset’s price, and “D” is the normal deviation from that average. High values above +100 indicate the start of a strong uptrend. Values below -100 indicate the start of a strong downtrend. The CCI is computed with the formula:

**Stochastic Oscillator**: In an interview, the creator of the Stochastic Oscillator, Dr. George Lane, said “it follows the speed or the momentum of price. As a rule, the momentum changes direction before price.” This important underlying detail indicates extreme cases of overbuying and overselling, allowing reversals for bullish and bearish phases to be identified. The crossover of %K and %D values indicate trade entry signals. Although a 14-day period is standard, binary option traders can use their own desired timeframes.

%K = 1 0 0 ( C − L14 H14 − L14 ) where: C = most recent closing price L14 = low of 14 previous trading sessions H14 = highest price traded during same 14-day period \begin

Levels above 80 indicate overbought, while those below 20 indicate oversold.

**Bollinger Bands**: Bollinger bands capture an important aspect of volatility. They identify upper and lower levels as dynamically generated bands based on recent price moves of a security.

Commonly followed values are 12 for simple moving average and two for a standard deviation for top and bottom bands.

Contraction and expansion of the bands indicate reversal signals that help traders take appropriate positions in binary options. Overbought situations are indicated if the current market price is above the top band. While overselling is indicated when the current market price is lower than the lower band.

A challenge in binary option trading is correctly predicting the sustainability of a trend over a given period. For example, a trader may take the right position for an index, predicting it would hit 1250 at the end of a five-hour period, but the level was achieved in the first two hours. Constant monitoring is needed for the rest of the three hours if the trader plans to hold the position until expiry, or a predetermined strategy should be executed (like squaring off the position) once the level is reached.

## The Bottom Line:

The technical indicators discussed above should be used for timely actions with constant monitoring. One major disadvantage with technical indicators is that the results and calculations are based on past data and can generate false signals. Traders should practice caution with detailed backtesting and thorough analysis for high-risk, high-return assets like binary options.

## Deal with normalisation of a binary digit

Binary is 0010 0001 0110 (note: floating point 8 bit mantissa and 4 bits exponent)

which correctly represents 16 ½ but is not in normalised form.

I need to convert it into a normalised form(start with 01) for 16.5.

What i try

exponent: 0010 as i moved 2 points so exponent is 2.

But the answer should be 16.5 that is mantissa with 0100 0010 and with exponent 0101, what am going wrong

## 1 Answer 1

16.5 decimal is 10000.1 binary.

Move the binary-point to the right of the leading 1 :

Exponents are usually represented in “biased” form (instead of two’s complement). With 4 bits, the bias should be 7 . So 4 + 7 = 11 , which in binary is 1011 .

Getting rid of the leading 1 in the significand (which is assumed), putting it into 8 bits and putting it after the exponent yields:

But it is unusual for floating point representation to have no sign bit. With a leading sign bit, 4 bit exponent and 7 bit significand it becomes: