Currently, many different oscillators exist in the market. One of them is the binary options’ indicator called Acceleration/Deceleration oscillator developed by Bill Williams in due course. This oscillator helps determining points when the asset’s price accelerates or decelerates. For this reason, the Acceleration/Deceleration oscillator binary options’ indicator is so interesting for traders.
Description of Acceleration/Deceleration oscillator binary options indicator
As we have mentioned above, this indicator measures acceleration and deceleration of a price. In other words, it measures whether a price will have the positive or the negative dynamics. A famous trader Bill Williams, the developer of this tool, says that the rate of change of this parameter can be determined far previously.
And this fully corresponds with what happens in the market. Before any trend finishes, deceleration of a price occurs and only then a new trend begins (however, exceptions occur too, though they are very rare in mid-term and long-term). Therefore, the direction of this oscillator’s line changes only when the driving force changes, and it will occur only when a price changes.
Visually, this indicator appears to be histograms. If we consider its growth period, it is displayed as the green bars, and the decline period is displayed as the red bars. As for the settings, you can set them according to the Bill Williams’s recommendations: 34 and 5. However, if traders work in the Forex market, these parameters may lead to the negative outcome, so we recommend changing it.
Trading signals of Acceleration/deceleration oscillator binary options’ indicator
The first trading signals, which we would like to consider, can be easily determined on the indicator’s binary option chart. When the histogram is located in the positive zone, in other words, when it is located higher than the zero level, the signal to buy the Call option will occur. But it’s necessary to mention that, at the same time, a price chart has to have two candles with the growing maximums in a row.
If the indicator’s histogram is located higher than the zero level, the signal to buy the Put option will appear. At the same time, it is important to abide the following condition: two candles with the declining minimums have to be located on a chart. The signal will be valid only in this case.
If the histogram is located lower than the neutral line, the signals to buy the Call options may appear. In this case, three columns with the growing minimums have to exist. At the same time, the Call option’s purchase is recommended only when a price overcomes the maximum of the signal candle.
The opposite situation refers to the purchase of the Put option. The histogram has to be located higher than the neutral line. At the same time, three columns with the declining maximums have to be located in a row. You can open the deal for the Put option’s purchase when the line which follows the signal line crosses the minimum of the signal’s line.
It is also important to remember that if the Acceleration/deceleration oscillator binary options’ indicator sends a signal, but the histogram color changes, the signal will lose its strength. For this reason, you don’t have to work according to this signal. Also, it is recommended to remember that the binary options’ indicator doesn’t send signals when the histogram crosses the neutral line.