The Rate of Change binary options’ indicator shows the strength of buyers and sellers in the market. It is easy to use this indicator, and it doesn’t require additional settings. In order to buy the Put option, it is necessary to wait until a price stays far above the level 1 and, at the same time, the indicator’s line has to reverse down. The purchase of the Call option is recommended when the indicator’s line is located below the level 1 and reverses up. Also, it’s necessary to follow the appearance of divergences on a chart. They also show that the market will reverse soon, and a trader can capitalize on it.
The ROC binary options’ indicator is one of the strongest oscillators. The indicator’s calculation is based on the comparison of the current prices with the previous ones. And the remoteness of the current period from the previous one is taken into account too. The time scales from one minute to one month can be used as a period. In other words, the variety of tasks which can be accomplished by the indicator is very wide. They can be used by traders who trade binary options with different expiration time: from a few minutes to a few months.
The Rate of Change binary options’ indicator allows determining how quick prices change in the market. The indicator is represented on a chart in the form of the line which moves in the range higher or lower than the level 1. It’s necessary to note that this binary options’ indicator can be referred to a category of the leading indicators. In other words, it reaches its peak values slightly earlier than a price.
The Rate of Change binary options’ indicator can be referred to the category of auxiliary tools, which determine the buyers’ and the sellers’ strength in the market by the particular trading tool used by a trader. If the indicator’s line grows and is located above the level 1, it means that the buyers prevail in the market. However, if the indicator’s line is located below the level 1 and continues to decline, it means that the sellers become stronger in the market. Also, this indicator can show divergences. When a new price maximum which is higher than the previous one forms on a chart and the indicator shows the price which is lower than the previous one, then the bearish divergence appears. The buyers become less strong and, as a result, the trend switches to the descending one. The opposite situation occurs when the price shows new minimums which are lower than the previous ones, and the indicator’s line forms minimums higher than the previous. In this case, the sellers’ strength exhausts and the reversal in the direction of growth occurs soon.
The inclination of the Rate of Change binary options’ indicator shows the strength of buyers and sellers. But it is not recommended to use this indicator as the single one. It’s better to use it together with other auxiliary tools for a trader in order to receive clearer and more stable signals.
Trading using this binary options’ indicator is not difficult. Buying the Put option is recommended when the indicator’s line is located higher than the level 1, on a decent distance, and reverses down. And if the indicator’s line is located lower than the level 1 and located fairly far-off, it is recommended to buy the Call option when it reverses up.
When the bullish divergence appears, you can consider buying the Call option. But it is necessary to remember that the divergence can develop for a fairly long time, for this reason, the best time to enter into the market is when the price reverses up. The same can be applied to the bearish divergence.