A trend indicator is one of the most popular tools which are used by traders for trading not only in the binary options’ market, but also in different currency exchanges and stock exchanges. Currently, its urgency arises from the fact that these indicators allow determining the possible direction of the price’s movement with a high accuracy.
There are many types of trend indicators. Each of them has its own specifications and peculiarities, but in common all of them are designed aiming to timely determine the trend, which arises in the market. As a result, a trader is provided with the opportunity to purchase the mid-term or the long-term option in the direction of the trend’s development. Given a fact that in this case a trade is conducted in the direction of a trend, the initial trader’s chances for success grow.
Main trend indicators
As mentioned above, there are many trend indicators, and they can be applied in trading. Each of them is effective differently, but, however, a list of the most frequently used trend tools exists:
- Bollinger Bands
All of these are designed in order to determine a trend, as well as the trend’s price level. In other words, in this case we mean not only the time, when the new trend arises and a trader is provided with an opportunity to buy the new option in the opposite direction. In this case, we also discuss maximum movement points which allow closing positions timely, as well as buying the new option in the opposite direction. It is achieved at the expense of the fact that each trend has its beginning and end.
As it follows from the description, trend indicator is a fairly flexible analytical tool, which promotes conduction of the complete technical analysis and provides the opportunity to manage trading processes in the real-time.
Principles of application
A trend is the certain tendency in the price’s development of an asset, when its quotes are moving in the intended direction for the certain time. If a trader knows how to determine such movements, then he will certainly manage to use these data to earn. Trend indicators render assistance in this situation. A generous amount of material about the quality of these tools exists. The best recommendation of these tools consists in a fact that these indicators are widely represented on all leading platforms, including the live chart.
Practically, traders frequently apply different combinations of trend indicators. Generally, about 2-3 indicators are used within a single strategy. Trends complement each other and allow an investor to choose only those signals which are really capable of bringing a profit.