Useful indicators for Newbies
This article is especially for newbies and for new traders in binary options and in trading industry generally. I am going to share with you some very useful indicators which can help you to improve your trading style. Some of them are really simple and I don’t use them now but they helped me very much in the beginning of my trading journey. Let’s start.
– Zig Zag indicator
The first indicator is very simple and you can find it in your metatrader platform. It’s the zig zag indicator which can help a traders to see more clear the tops and the lows of the market.
Barry is a simple indicator wich draws support and resistance levels. Drawing supports and resistances is a “must” for trades but many newbies have difficulties. So, this indicator can help them and learn them where are the supports and resistances levels.
You don’t have to do something difficult just install this indicator to your metatrader platform and after this drop it to your chart.As you can see in the above chart the red lines are resistances and the blue lines are supports.Of course this indi can’t identify future S&R levels. It just draws a support or a resistance as has happened.
– Overbought and Oversold (RSI and value chart)
For overbought and oversold conditions I have two indicators to recommend you. An overbought condition is a condition in which the asset is much higher from the normal levels and maybe we will have a fall. Oversold is the opposite condition. An asset it’s much lower than the normal levels and maybe we will have a possible rise of the market.To identify these two conditions you can use a RSI indicator from your metatrader platform or a value chart indicator.
– RSI & Value Chart
In this chart, which is the previous chart with barry, I installed both of them to my metatrader software. In RSI you can add from the configuration two levels. One for overbought conditions and another one for oversold conditions. Many traders use for these two situations the level 70 for overbought and the level 30 for oversold. You could also use 80 and 20 levels for more safety.As you can see in this chart in the RSI we have overbought at highs and oversold at lows.
The value chart indicator does the same job. Green bars are bullish and red bars are bearish. In this indicator you can also gix the levels. Many traders use 8 and -8 lebels for extra overbought and oversold situations and 6 and -6 for softer situations.
– News Indicator
A very important indicator for your charts is a news indicator. I don’t have a specific news indicator to recommend you because there are so many out there and generally they do all the same job. A news indiacator shows you if there are news for the market or when we will have news releases. Even if your strategy is not to trade the news you should have an indi like this to know what time there are news and stay away from the market because if you will ignore the news they can destroy your trades.
– Bollinger Bands
Very useful and effective indicator created by John Bollinger. It helps you to identify Support and Resistances levels. There is a simple moving average, usually 20 periods, and two bands (up and down) and they can act as S&R levels for the price.
Notice how the price makes bounces in the bands.
– Daily Pivots Indicator
Simple indicator which calculates and shows you the daily Pivot levels of the market. It’s very important because there are S&R many times in these levels.
– Harmonic Patterns indicators
Harmonic Patterns are an advanced lesson of Technical Analysis and it needs to spend time to learn how to draw them. There are indicators which draw harmonic Patterns automatically like ZUP.mq4 or KorHarmonics.mq4. If you are interested in Harmonic Patterns but you can’t draw these indies are a good start. Of course they make wrong estimations many times but they can help you to start drawing by yourself.
A bullish CRAB pattern by KorHarmonics.
From the most important indicators. I use it every day for many reasons but mainly to identify bounces and retracements. You can find it in your metatrader platform in your drawing tools. Levels to add are 38.2, 78.6 and 127. All the others important levels already exist in the default settings.
– Moving Averages
I wrote an article about moving averages and how to use them. There is nothing standard for the settings as i said many times. I told you the setting I use you can do your backtest and see which settings are the best for your strategy.