Linear Regression binary options’ indicator provides a trader with a possibility to use the so-called channels. It means that a price moves between resistance and support lines for the certain time and rebounds from them. In other words, some sort of channel forms in the market, and a trader can buy binary options and trade within this channel successfully. However, you can build channels without this indicator too. But sometimes this work is beyond the trader’s scope. In addition, the auxiliary tool will simplify the trader’s work significantly.
The binary options’ strategy where channels are used is one of the most widespread in almost all markets. When a trader uses the Linear Regression binary options’ indicator, he will not need to search for the significant extreme points on his own in order to build a channel. This auxiliary tool for a trader will build the necessary lines on any timeframes on its own.
The practical application of the Linear regression binary options’ indicator provides the opportunity to conduct more profitable trading. And it is so, even though that the building of channels is pretty easy task for any trader. The work of this indicator comes down to the building of support and resistance lines on a chart. Apart from these two lines, the centre line, which simplifies a visual display of the indicator, is built on a chart too. The price mark, which acts as a some kind of a guide if a trader trades aiming to breakout the level, is displayed on a chart too.
The main showing that deserves the trader’s attention during setting-up the indicator is the channel’s duration of time. This showing has the direct influence on the channel’s width. This setting is based on the time scale on which a trader works. At the same time, the shorter a time scale used by a trader is, the shorter will be an interval which has to be set. For example, if a trader trades on the minute’s time scale, the half-hour time will be enough for him.
The following indicator’s settings can be accentuated:
- FixedDateTime. This option allows changing the channel’s length. Data are filled-in here when it is needed to start building the indicator.
- STOPColor. This option is for the price mark display. A color of this mark is chosen according to the platform’s background.
- TrendLineColor. This option allows choosing the color of trend lines which form the regression channels.
- LRWIDTH. This parameter allows choosing the color of lines of the regression channel.
If you use this Linear Regression binary options’ indicator, you will be able to trade using several strategies. One of them is a strategy for the breakout or the trend following strategy. It is assumed that a price can occasionally breakout the certain levels of resistance and support and move forward according to a trend. In such cases, a trader can use the breakout strategy. For example, a price can breakout the support line within the descending trend. At this time, a trader can buy the Put option. If a price breaks the upper channel’s line, a trader can buy the Call option.
Apart from the breakout trending strategies, a trader can also use the rebound trading strategy. In this case, it is assumed that a price rebounds from the channel’s bounds and moves towards the opposite one. If a price has rebounded from the upper channel’s bound, a trader can buy the Put option. If a price rebounds from the bottom bound, a trader is recommended to buy the Call option.