TRIX indicator for binary options belongs to the trend type and shows possible reversal points, which can be used for the binary options’ purchase. Trading using this indicator is pretty simple. When the trend line crosses the middle line from down to up, a trader has to buy the Call options. If the TRIX indicator’s line crosses the neutral line from up to down, the signal to buy the Put option appears. The best way to use this indicator is with other auxiliary tools for a trader in order to receive stronger signals.
TRIX binary options’ indicator reflects the changes of price, smoothing small oscillations at the same time. This indicator is a symbiosis of the moving averages and the indicator Rate of change. It is necessary to note that this indicator is unique. Its calculation formula is unique as well. The main task of this indicator is to smooth the slight price oscillations. As for the visual representation, this indicator looks as the line which moves round the zero level.
TRIX binary options’ indicator is used by trading professionals in order to determine the reversal points on the price chart. In order to receive stronger signals from this indicator, you can add the moving average with the period of 9. The crossing of the indicator’s line and the moving average can be also used as the signal to buy the Put or the Call binary options.
In order to start working with this indicator, it is needed to choose periods for the moving averages. The TRIX is based on the exponential moving averages. This binary options’ indicator estimates the relative variations. If the line is located in the positive zone, in other words, if it is above the zero level, then buyers prevail in the market. Therefore, if the indicator’s line is located below the zero level, sellers prevail in the market.
When the indicator’s line crosses the neutral line from down to up, a trader is recommended to buy the Call options because this is the time when it becomes clear that the ascending trend finally establishes in the market. If the TRIX indicator’s line crosses the zero level from up to down, the signal for the Put option purchase appears because the descending trend is forming in the market.
As already mentioned above, the indicator can be used together with the additional signal line (there is no such on our binary options’ chart). If the indicator’s line crosses the signal line from up to down, the signal to buy the Put options appears. And if the indicator’s line crosses the signal line from down to up, the signal to buy the Call option appears.
But usage of this indicator has to be careful. It is important to remember that it is suitable only when a trend is present in the market. When the market is in the flat, the indicator’s line can send false signals, in other words, it shows oscillations when there are no clear movements in the market. Of course, in such situations usage of this indicator is useless for a trader, and, what is more important, it can lead to bad results in trading. Also, it is important to remember that usage of only this one binary options’ indicator may be less effective than usage of several indicators during trading.