Free Signals to Binary Options
The financial markets can be difficult to navigate but advancements in financial technology have made it easier. One of the more popular products as of recent are binary options. A binary option is simply making a true or false prediction on an underlying asset. With that, many individuals have attempted to trade and end up losing money due to lack of education and practice.
To circumvent that necessity, people have begun relying on binary option signals, which are automated services that provide you the trader entry and exit signals with the intent to make money. No matter what, there are fraudsters in any business and finance is certainly no different. This means you should analyze any signal service you are interested in using. In this article, we’ll go through the different free binary option signals and how to implement them.
What are Binary Option Signals?
Binary option signals are a service that either provides software or a communication that alerts traders to when there are possible entry and exit point in a market. Once you receive an alert that states the market is in a buy or sell position, it is up to you to enter that position.
Signals are a valid way to give you an extra boost in trading. What you shouldn’t do is rely upon these signals as your income stream, but rather use them in a manner that accents your current trading style. If you are a day trader or someone who enters and exits positions quickly, signals are a strategic way to alert you while you’re busy with other matters. The idea is you have an understanding of the market and use signals to help you find opportunities you otherwise would have missed.
The Most Important Technical Indicators for Binary Options
There are several ways to trade binary options and with that comes the different types of tools necessary to read a chart. Two schools of thought triumph in the markets and they include fundamental and technical analysis. Binary options are better suited for technical analysis and the reason being are the underlying assets they cover. Many binary options cover indices or Forex, which offer little in the way of fundamental analysis. However, with equities, there is room for fundamental analysis, but many binary options are not long in expiration. With a focus on technical analysis, let us go over some of the more important technical indicators that are used in binary option trading.
The first one is the RSI or the Relative Strength Index. RSI is a measurement of momentum and fluctuates between 0 and 100, which 100 indicating a potentially overbought market and a 0 representing a potentially oversold market. This allows you to see when markets may be entering an area to buy or sell. You can customize features within the RSI to fit your personal needs. Typically, when the RSI dips below 30, many start to watch for potential buying opportunities and when the RSI rises above 70, people look above 70.
Another popular technical indicator is moving averages. While many different lengths can be used, typical lengths include the 20 period length, 50 period length, and 200 period length. The idea with the moving average is first you can identify the trend, and then look to enter a trade. An example could be when the 20 period length moves below the longer term 50 or 200 period, this can be an indication the market will be bearish. If you were to combine this with an RSI indicator, you can begin to narrow in on a potential strategy that fits your needs.
The last indicator is more of a statistical indicator but works very well with technical indicators and that is Bollinger Bands. Bollinger Bands are produced on the chart with usually one deviation to the upside and one deviation to the down side, with the mean being in the middle. This indicator is beneficial to traders because it can begin indicating when markets are trading out of their normal range. When it reaches too high or too low, you can look to enter trades are those points. Confirmation can come from other indicators such as an RSI or Stochastic.
One item to consider with all technical indicators is to adjust them for your time frame. Some may work better with adjusted inputs but only you can determine that through testing and research.
Are Signals Useful or a Waste of Time?
Many individuals have very extreme opinions on signals that include they are the best and swear by them or they are poor and useless, only inducing dependence on something that many don’t understand. Then there is the middle ground in which signals can be a useful part of a trading strategy.
First, signals can be a waste of time if you are uneducated about what the underlying methods are behind the signals. Having a dependence on something out of your control is not a position you want to be in. The other downfall is there are many different services that claim a certain amount of profitability when in reality they simply want your money and have little concern for the wellbeing of their client.
Next, the benefits to using signals include a new way to help generate potential trading opportunities. With binary options, many of the expiration times are short in duration and it can be difficult to monitor several markets at once. Once you are signaled to a potential trade, you can complete a quick analysis on if it is worthy of a position. Another potential useful part of signals is you can begin learning to view different parts of the market you would otherwise ignore.
The ideal way to use signals are to further your knowledge of your current trading system and other markets. When you implement a signal service, you want to understand what makes the signals occur and see if it fits your current strategy. Reliance on the signals for income is not ideal but utilizing it in a proper manner can unlock hidden potential.
Where to Get Free Signals
There are many valuable resources out there and can be utilized in your current trading strategy. The first is TradingView.com and their signals portion of the website. TradingView allows other individuals to come together and discuss current market happenings. While these are not all true signals, it allows you to see other people’s analysis of a variety of markets and where they believe it may be headed. From Forex to Bitcoin, you are likely to find others who are focusing on the same markets. Once you find something, you can even utilize their free charting platform and test it yourself.
Another website that has a signal widget is OlympTrade.com. On their signals page, they allow you to view signals of Forex, commodities, indices, and stocks. It states on their page that these signals, “do not guarantee profits” and that if combined with other technical and fundamental analysis, you can “substantially increase your chances of a successful trade”. While these signals do not give their underlying calculations, you can use them in conjunction with your current trading strategy.
Lastly, there is Finmaxbo.com that offers signals for their users. While you must be a user to access their signals, as with the two mentioned above, it is important to know your strategy and use signals as an additional tool and to not rely heavily upon for income generation.
Free Signals vs. Paid Signals
Lastly, there are several free signals and paid signals you can incorporate into your trading methodology. With free signals you are not risking anything except for the time you put into testing the signals. When testing signals ensure you are doing so on a demo account. You should not be risking your hard earned capital when testing. Free signals are also simple and with TradingView.com, you have the ability to publish your thoughts for others to comment on.
With paid signals, you need to be careful as many services lie about their result in an effort to obtain your money. While there are ones out there that are genuine and can provide value, these are vastly out numbered by fraudsters looking for a quick buck. Ideally, you would have a strategy in place and only look to implement this as an asset. Also, you can look to build your own signals that work for you, as you want them to.
Overall, signals can be an extremely useful way to increase your income when a proper trading strategy is in place. It’s almost as if you have a second pair of eyes scanning the market and alerting you to potential entry and exit points. However, you need to be wary of the fraudulent signals out there, especially paid services. Instead look into testing the free signals and see how they interact with your style. Lastly, you can even build your own signal product that works how you see fit. Signals can be a wonderful added asset your trading system but do not become dependent upon the signal as a means of income as that can quickly lead to issues down the road. If implemented properly, signals can be a large asset.