Binary Options 2.0
Metatrader Indicator (MT4/MT5)
This indicator analyzes price action patterns and helps you to make positive equity decisions in the binary options market.
- Easy to trade
- Trade both call and put options
- No crystal ball and no predictions
- The indicator is non-repainting
The only strategy suitable for binary options is applying a mathematical approach, like professional gamblers do. It is based on the following principles:
- Every binary option represents a 50/50 random event
- Predicting if the next bar will close up or down is impossible
- The only way to make money is paying the right price for all wagers
- Long-run mathematical expectation is all that matters
To use this indicator you need a true binary option provider. Most so-called binary options brokers do not offer binary options at all, but offer a gambling setup based on expirations in time. But a true binary option is like any other option, it has a strike price and a expiration stamp, and can be bought and sold until expiration. A true binary option provider shows the price of the option as market participants exchange it during the session.
A true binary option has a price between 0 and 100, and it fluctuates. If the option expires in the money, then the closing price of the option is 100. If it expires out of the money, the closing price is zero. The price fluctuates as people buys and sells it during the session until expiration. Your profit is the difference between the price at which you bought the option and the price at which it expires. For instance, if you buy an option for 50 and it closes in the money, at 100, you make 50. If you buy it at 50 and closes a zero, out of the money, you lose 50. If you buy it at 25 and closes at 75, you make 75.
How to Trade
The indicator analyzes price action patterns and displays crucial information on the top-right corner of the chart at bar closing.
- At what price you should buy a call option
- At what price you should buy a put option
- Can the trade still be placed?
The indicator does not predict the direction of the next bar. What it does is analyzing price action and calculating how much is reasonable to pay for both options. Given the opportunity, you should trade both directions, and both would be a positive equity decision in the long run. You should never trade "out of time".
This indicator will not provide you with trades often, but selective situations in which trading makes sense.
Oscillator and Chart Indications
The indicator displays past values on the chart and implements a relative strength oscillator that measures the overall tendency using two moving averages: if the main line is above the signal line, bars tend to close above the open price and vice versa. Additionally, strong breakouts or false breakouts are directional factors to have in count, and are portrayed on the chart by a trailing "+" to the candlestick data.
The Truth About Binary Options
Binary Options have become very popular and attract a lot of novice traders, who find it easier to trade binary options than doing actual trading because position management is out of the equation. Most of them feel they have an edge because they can read technical charts, but ignore that short-time price movements are completely random and have nothing to do with technical analysis.
Binary Options have an expiration time, and therefore cap your profits in two dimensions: price and time. The odds of the future price being above the current price in a fixed period of time are always a 50% chance, and thus trading binary options is actually gambling on instruments with a very bad payoff structure.
The mathematical truth is that binary options are rigged against the trader. But if you still want to trade them, this indicator is your best chance.
- ≡ Input parameters
When loading the indicator or EA to any chart, you will be presented with a set of options as input parameters. Don't despair if you think they are too many, because parameters are grouped into self-explanatory blocks.
- Fast MA
- Fast MA Period for the oscillator
- Slow MA
- Slow MA Period for the oscillator
- Max History Bars
- Amount of bars to evaluate when just loaded
- Drawing: Drawing
- Color and sizes options
- ? FAQ
- This indicator does not display which direction to trade!
- That is correct, it does not. You should trade in both directions given the opportunity.
- Which is the strike rate of the indicator?
- There is no strike rate! The indicator does not tell you which direction to trade, because predicting the outcome of the next bar is impossible. The indicator displays how much is reasonable to pay for both call and put options. Given the opportunity, you should trade both directions.
- What is the oscillator for?
- The oscillator displays the direction of all bars in the chart and two moving averages which portray the market tendency. If the main line is above the signal line, the market is bullish and vice-versa. You can use this information to make discretionary decisions.
- Do you trade binary options?
- No, I don't trade binary options. I prefer actual trading because 1) I can let profits run for days, weeks or months at my discretion, 2) I have much more control over my trading and 3) The return on my personal time is much higher. However, I can eventually use options to hedge my positions.
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