A common tool that Future traders use is the high/low moving indicator. The tools incorporates two moving averages that is based on a period’s highs and lows in order to make a price channel moving average envelope. Nonetheless, is this indicator useful for traders of binary options?
KNOWING MORE ABOUT THE HIGH/LOW MOVING AVERAGE INDICATOR
This tool is commonly used by futures traders. It is just like price channels and moving average indicators but are quite simpler. It makes use of two moving averages. One moving average is based on higher prices and the other is based on lower prices. This is quite unique from the usually moving average which is solely based in typical or closing prices. The average makes price channels that you can use in different ways for signal generation and trend confirmation as well as resistance and support.
USING THE HIGH/LOW MOVING AVERAGE INDICATOR
The first thing you need to do is to calculate moving averages. This is based on easy moving averages and two varied time periods. You will know if it’s a high moving average when there is a simple ten bar moving average. Low moving average only comes with 8 bars. You can download the high/low MA indicator tool if your chart package does not have it.
The tool is not used as a tool for crossover but you can also use it this way. What can be measured as a great signal that follows trend is a hard break below or above the upper moving average. You can use this strategy together with a trend or trends so that you can get rid of fake signals.
There will be a contrarian signal if there is a break just outside of the envelope which is counter to the existing trend. An example would be prices being sold in a robust downward trend, you can go for support and then bounce higher. You can enter Put if prices can break high moving average contrarian.
Moreover, you can use this tool when you want to find and confirm support. There is also a similar behavior of the moving average to prices. This may break or bounce through areas with support and resistance. When prices test and break through temporarily through an area with support and resistance while the high and low envelope verifies that either resistance or support, it is signifying an additional contrarian entry signal. This strategy is also a great trend following indicatory. It confirms trends in a similar way as resistance and support confirmation. Once the indicator moves, bounces and trends from trend line then it signals trend following entry.
As a plus, you can also use this indicator for volatility measurement. Once the envelope becomes wider, there is increase in volatility and the moment it narrows it shows that there is a decline in volatility. Binary traders may not find this very useful but it can be used together with other tools in order to get prospective entry points. Another way to trend on such signal is to enter positions that follow trend when there is a very narrow envelope and when the envelope is wide then there is a contrarian position.
WHY IS THIS INDICATOR GOOD?
For starters, this strategy is great. One reason why it does not suck is that it mixes many kinds of analysis to a single indicator. This is really beneficial for binary traders because you can actually add this and get rid of two other indicators. Channels and moving averages are very well recognized and trustworthy indicators for trading, giving numerous signals. The indicator mixes those features thus allowing to offer at least five varied kinds of signals. Another thing why it is good is that newbies can find it quite appealing and easy to use.
WHY IS THIS INDICATOR BAD?
This indicator is not so good because it is just a single indicator. If you are a fan of using more than one indicator and time frames for getting great signals, then you might not enjoy this. On its own, this may offer a lot of false signals and whipsaws for it to be really efficient for binary signals. Nonetheless, mix it with other tools such as Fibonacci, trend lines, and other tools then you can surely appreciate its true beauty.
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.
Wonderful job on the post. Learned tons.
Great beat ! I would like to apprentice while you amend your web site, how can i subscribe for a blog web site?
The account aided me a acceptable deal. I had been a little bit acquainted of this
your broadcast provided bright clear idea
I’m not that much of a online reader to be honest but your blogs really nice,
keep it up! I’ll go ahead and bookmark your website to come back later on. All the best
Thank you a lot for sharing this with all folks you really understand
what you’re talking about! Bookmarked. Kindly also
consult with my web site =). We can have a
link exchange contract between us
Hello, I enjoy reading through your post. I like to write a little
comment to support you.
Good day very nice web site!! Man .. Excellent .. Wonderful ..
I’ll bookmark your web site and take the feeds additionally?
I’m satisfied to find a lot of useful info here in the publish,
we need work out extra techniques on this regard, thank you for sharing.
. . . . .
I like the helpful info you provide in your articles. I’ll bookmark your weblog and check again here regularly.
I’m quite sure I will learn lots of new stuff right here!
Good luck for the next!
I was very happy to find this website. I wanted to thank you for ones time due to this fantastic read!! I definitely liked every part of it and I have you book marked to check out new stuff on your website.
http:///www.manulescu.com – manu manumanu
It’s very trouble-free to find out any topic on web as compared
to textbooks, as I found this post at this site.
Awesome blog! Do you have any hints for aspiring writers?
I’m planning to start my own blog soon but I’m
a little lost on everything. Would you advise starting with a free
platform like WordPress or go for a paid option? There are so
many choices out there that I’m completely confused ..
Any tips? Thank you!
If you are going for finest contents like
myself, just pay a visit this web page all the time because it offers quality contents,
thanks
I’m gone to say to my little brother, that he should also visit this web site on regular basis
to get updated from most recent news update.
Good day! I just want to give you a big thumbs up for the excellent
info you have got right here on this post. I will be returning to your blog for more soon.