What are Binary Options Trading Signals Should You Use Them

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Contents

The Most Important Technical Indicators For Binary Options

Consider the following bets:

• Pay $45 to bet that the price of gold will be above$1,250 at 1:30 p.m. today. Get $100 ($55 profit) if you win, lose $45 otherwise. • Receive$81 now to bet that NASDAQ US Tech 100 index will go below $2,224 at 2 p.m. today. Keep a profit of$81 if your prediction comes true. If it does not, lose $19. • Pay$77 to win $100 if the USD-JPY forex rate goes above 78.06 at 2 p.m. today; you lose$77 if it does not.
• Gain $33 if you bet on the price of bitcoin will go below$379.5 at 3:00 p.m. today. If it doesn’t drop that much, lose $67. Welcome to binary options. All or nothing, one or zero, these securities are available on Nadex and the Chicago Board Options Exchange (CBOE). Binary options allow traders to make time-bound conditional bets on predefined values of stock indices, forex, commodities, events, and even bitcoin values. Like a standard exchange-traded option, each binary option has an option premium ($45, $81,$77, and $33 in the examples above), a pre-determined strike price ($1,250, $2,244, 78.06,$379.5), and an expiry (1:30 p.m., 2 p.m., 3 p.m. today).

The differentiator is the settlement price that remains fixed at $0 or$100, depending on the option condition being fulfilled. It keeps the net profit (or loss) fixed. The option premium also remains between $0 and$100. (Related: Guide to trading binary options)

Calculating Probability

Since binary options are time-bound and condition-based, probability calculations play an important part in valuing these options. It all boils down to “What is the probability that the current gold price of $1,220 will move to$1,250 or above in the next four hours?“ The determining factors include:

• Volatility (how much and is it sufficient to cross the threshold/strike price?),
• The direction of the price move, and
• Timing.

Technical indicators suitable for binary options trading should incorporate the above factors. One can take a binary option position based on spotting continued momentum or trend reversal patterns. Let’s look at some of the popular binary option technical indicators:

• Wilder’s Directional Movement Indicators (DMI) Average Directional Index (ADX): Composed of three lines, namely ADX, DI+, and DI-, and their relative positions, this indicator aims to capture the strength of an already identified trend. Here is the table for interpreting the trends:

Position

Momentum

Here is an illustration, using 3M Company (MMM) stock:

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Image courtesy StockCharts.com

Depending upon the identified momentum and trend strength, an appropriate buy/sell position could be taken.

• Pivot Point(in conjunction with support and resistance levels): Pivot point analysis helps determine trends and directions for any given timeframe. Because of the flexibility in timing, pivot points can be used for binary options, particularly for trading highly liquid major currencies. A good example (with calculation and graphs) is included in the article Using Pivot Points in Forex Trading.
• Commodity Channel Index (CCI): The CCI calculates the current price level of a security relative to the average price during any given timeframe. The average price level is usually the moving average. Time periods can be selected as desired, allowing the trader flexibility in choosing when a binary option expires. The CCI is useful in identifying new trends and extreme conditions of overbought/oversold securities. It is very popular among day traders for short-term trading and may be used with additional indicators such as oscillators. In the below formula “price” is the asset’s current price, “MA” is the moving average of the asset’s price, and “D” is the normal deviation from that average. High values above +100 indicate the start of a strong uptrend. Values below -100 indicate the start of a strong downtrend. The CCI is computed with the formula:
• Stochastic Oscillator: In an interview, the creator of the Stochastic Oscillator, Dr. George Lane, said “it follows the speed or the momentum of price. As a rule, the momentum changes direction before price.” This important underlying detail indicates extreme cases of overbuying and overselling, allowing reversals for bullish and bearish phases to be identified. The crossover of %K and %D values indicate trade entry signals. Although a 14-day period is standard, binary option traders can use their own desired timeframes.

%K = 1 0 0 ( C − L14 H14 − L14 ) where: C = most recent closing price L14 = low of 14 previous trading sessions H14 = highest price traded during same 14-day period \begin &\text <\%K>= 100 \left ( \frac < \text– \text > < \text– \text > \right ) \\ &\textbf \\ &\text = \text \\ &\text = \text \\ &\text = \text \\ \end ​ %K = 1 0 0 ( H14 − L14 C − L14 ​ ) where: C = most recent closing price L14 = low of 14 previous trading sessions H14 = highest price traded during same 14-day period ​

Levels above 80 indicate overbought, while those below 20 indicate oversold.

• Bollinger Bands: Bollinger bands capture an important aspect of volatility. They identify upper and lower levels as dynamically generated bands based on recent price moves of a security.

Commonly followed values are 12 for simple moving average and two for a standard deviation for top and bottom bands.

Contraction and expansion of the bands indicate reversal signals that help traders take appropriate positions in binary options. Overbought situations are indicated if the current market price (CMP) is above the top band. While overselling is indicated when the CMP is lower than the lower band.

A challenge in binary option trading is correctly predicting the sustainability of a trend over a given period. For example, a trader may take the right position for an index, predicting it would hit 1250 at the end of a five-hour period, but the level was achieved in the first two hours. Constant monitoring is needed for the rest of the three hours if the trader plans to hold the position until expiry, or a predetermined strategy should be executed (like squaring off the position) once the level is reached.

The Bottom Line:

The technical indicators discussed above should be used for timely actions with constant monitoring. One major disadvantage with technical indicators is that the results and calculations are based on past data and can generate false signals. Traders should practice caution with detailed backtesting and thorough analysis for high-risk, high-return assets like binary options.

Our goal on this page is to introduce you to binary options signals and the individuals and companies that provide them. You’ll learn how they are used, and how to choose a service provider that accommodates your trading style. Below, we’ll cover cost considerations, trusting your chosen service, and taking action on their recommendations.

The concept behind trading binary options is simple. Each trade is a prediction about the movement of an underlying asset’s price. Will it go up or down? Will it hit a specific level? Will the price stay within, or move outside, a given range? You’ll know upfront how much of your money is at stake and how much you’ll receive if your prediction is correct. A number of binary options signal services have sprung up to help you make these predictions.

So, why would you need a signals service if trading binary options is easy? Because placing a trade is a lot different than analyzing whether the price of the underlying asset is poised for a rise or fall. And that’s exactly what such services do for you. Below, we’ll take a look at how to use them to your advantage.

How To Leverage Binary Options Signal Services

Binary options signals are essentially recommendations. They arrive on various platforms – for example, email, mobile, or voicemail, depending on the provider – and highlight a particular trade to execute. Although every provider takes a slightly different approach, their alerts usually include much of the same data. You’ll be notified of the asset, the type of trade to place, the expiration date and time of the contract, and the price at expiration (i.e. the contract’s strike price).

If you trust the service to which you’re subscribed, you can simply place the trades as they are recommended. Or, you can perform your own research to check whether your results corroborate the service’s recommendations.

A lot of traders, both novices and those with years of experience under their belts, use binary options signal providers to save time and improve their results. Rather than spend hours combing through candlestick charts and keeping their eyes glued to the TV for news affecting certain assets, they outsource the effort.

Doing so frees up their time since they can avoid becoming bogged down in the research. It can also boost their returns as long as the signals they receive are consistently accurate. But accuracy alone are not enough…

Accurate Signals Don’t Guarantee A Profit

The alerts sent by binary options signal services are meant to be acted upon quickly. They reflect a very small window of opportunity for placing profitable trades. For example, some of the recommendations you’ll receive involve contracts that expire within an hour. Some expire in as little as 60 seconds. It does little good to act on signals after they have aged and cooled.

We mention this to point out that signal services are valuable only if you’re able and willing to take action shortly after the alerts are distributed. Otherwise, your opportunity to profit on the recommendations will evaporate.

Are Binary Options Signal Services Reliable?

The notifications you receive are only as good as the company or individual behind them. Some services are run by companies that employ numerous analysts who pore over price charts, looking for various technical indicators. Other services are operated by veteran traders. They have years of experience, and use their expertise to produce signals that help other traders place profitable trades by allowing you to watch in real time as they make binary trades (BOTS has this “mirror trading” feature).

If you’re uncertain about whom to trust, look for credible reviews online. Many traders have subscribed to multiple binary options signal services, and have hands-on experience with their recommendations. Some of them have taken the time to review the providers they’ve used.

You’ll learn which services provide the most accurate signals along with which ones have an abysmal track record. You’ll also learn which providers send alerts that never actually lead to executable trades. In other words, they recommend getting into contracts at certain prices that are never hit. Ultimately, if a binary options signal service is providing bad (or unprofitable) signals on a regular basis, the reviews will help you to recognize them.

Justifying The Cost Of Binary Options Signal Services

Some providers offer free alerts. They recommend daily trades without requiring you to pay for a subscription. Before taking action on their recommendations, be wary. Track their results. Make sure that a reasonable percentage of the contracts they recommend end in the money. If the service is free, the provider may not be driven to retain subscribers. If that’s the case, there may be little incentive to provide accurate signals.

Most of the reliable binary options signal services we’ve found require a paid subscription. The cost typically ranges from $97 a month to several hundreds of dollars per month. Some, like Binary Options Pro Signals (BOP Signals) allows you to take a$7 trial run that lasts an entire week.

Is the cost worth paying for these services? It depends on your trading activity! Suppose you join a service that costs $97 a month, but you rarely trade. Your inactivity might make the investment a losing proposition. On the other hand, suppose you’re paying$397 a month, and use the alerts to place several trades per day that end in the money. You might profit thousands of dollars each month, making the investment relatively small and definitely worthwhile.

If you’re wondering whether you should pay for a binary options signal service, take a close look at how often you trade. An avid trader who decides to “save his money” by dismissing such services might save pennies at the cost of sacrificing dollars.

Are Signal Services For Binary Options Enough?

If you pay for a signals service, is it necessary to conduct your own research? After all, why should you spend time analyzing assets and contracts if you’re paying a company or individual to do it for you?

There’s no simple answer. If you were guaranteed to make a profit on every recommendation sent by the signal provider, you could simply disregard doing your own research. But there is no such guarantee. You might still lose your investment acting on the alerts sent by the provider.

For this reason, it’s a good idea to learn as much as you can about the assets you’re trading and the factors that affect their respective prices. For example, what might cause the price of gold and oil to move up or down? Why does Google’s share price move in a particular direction, especially after an analyst call? What factors can impact the price of the Euro-US Dollar currency pair?

Your own research can serve as a check on whether the signals you receive make sense. That can only move the odds toward your favor.

Forum Research Is A Great Asset

• Profitsbinary.com vs BOTS.com
• Binary Options Pro Signals

Last Thoughts On Picking A Binary Options Signal Service

Now that you’re familiar with signal services, including how they work and how you can leverage them, you’ll need to select a credible provider. Earlier, we mentioned reading reviews written by those with experience. Here are a few additional tips:

First, disregard the price of the service. The fact that a provider charges $397 a month does not mean the signals are 4 times as accurate as those from a provider charging$97 a month. In fact, the price doesn’t mean much of anything. Hence, resist the temptation to use it as a quality indicator.

Second, if a binary options signal service provider makes outlandish claims (for example, “Double your money each day!”), turn around and walk away. Or at least, be wary.

Third, don’t simply trust screenshots posted by the signals provider. Screenshots can be easily doctored to display anything the provider wants to show. They may be accurate, but how do you know for certain?

Fourth, look for a solid track record and a good reputation among traders. This is where reading credible reviews comes in handy. If a lot of active traders are extolling the virtues of a specific service, there’s a good chance the provider meets a certain level of quality.

To be clear, you don’t need to subscribe to a binary options signal service to trade profitably. You can do the research on your own and take action based on your analysis. Having said that, a high-quality signals provider can alleviate a lot of the work.

One important note before we get started: you don’t need to receive binary options trading signals to trade. The majority of traders participate without them. Having said that, it is worth being familiar with the tools at your disposal so you can make an informed decision regarding whether to use them. If you are looking for a binary option currency trading signals with a live trader then you should check out BOTS as Franco trades currency live.

The Best Binary Option Signal Providers and Services of 2020

Many people earn extra cash through binary options trading. However, without the right tools, inexperienced traders can stand to lose far more than they anticipated. For anyone interested in making the most of binary ​trading, signals provide an authoritative resource for quality advice.

Traders of all experience levels can better understand the course of the market by paying attention to signals and using signals services.

Though many higher-level binary options broker accounts come with the benefit of an account manager, signal ​providers may have a more calculated and readily available approach, using software and algorithms to provide actionable insights for brokers.

Signal services do the hard work that would require a person to stare at a computer screen for days. Signal services can detect—and advise on—even the smallest changes in market trends and accurately direct traders toward new assets.

The Best Binary ​Options Signals of 2020

Binary Options Pro Signals

​Binary Options Pro Signals (BOPS) is a subscription service that offers automated trading alerts sent to you in real-time via email or SMS. BOPS uses sophisticated trading algorithms and advanced indicators to accurately predict short-term market direction. With this provider, you’ll receive up to 18 trading signals per day, which is more than most signal services.

​When you subscribe to Binary Options Pro Signals, you’ll instantly start receiving trade alerts based on 14 different assets that BOPS monitors. These assets include stocks, indices, and currencies. The signals will include ASSET, entry price, market direction (call or put), and the expiry time. After receiving the trade alert, all you have to do is login to your preferred broker account and place the trade.

The win rate for these signals is an impressive 71.20%, which is above average for the industry. If you want to test-drive this service, you can take advantage of their free 7-day trial. After the trial period, subscriptions cost \$97 per month. If you’re looking for a reliable signal provider and an impressive win rate, you can’t go wrong with Binary Options Pro Signals.

With over 15 years of proven trading experience, Binary Options Trading Signals (BOTS) is one of the top-ranked signals services in binary ​trading. Specializing in Forex and Nadex options, BOTS is an excellent source of ​automated trading signals.

Offering a free morning trial, BOTS prides itself on providing a unique strategy based on easy-to-read proprietary charts. The service delivers a quality trading education on the different types of trading markets. It also guides users through the most important ins and outs of binary trading.

Like other signals services, BOTS provides real-time signals to traders looking to place profitable trades. However, unlike less-detailed signals services, BOTS explains the “why” component of their signals. BOTS prioritizes traders’ understanding, answering user questions on risk management, and the importance of discipline in binary options trading. BOTS has built a trading community based on knowledge-sharing and educational resources.

Auto Binary Signals

Auto Binary Signals is a ​binary signals provider that has been around since 2020. Rather than sending trade alerts to your smartphone or by email, the signals are available through their web-based membership area.

This means you have to actually login to your members area in order to see the trading signals, which could be a disadvantage for those looking for real-time alerts.

Auto Binary Signals works by automatically filtering through thousands of potential market opportunities in real time. A signal is only generated when there is an 80% chance or higher of winning a trade. The trade alerts are generated using a sophisticated strategy that uses 5 different indicators. A signal is only generated when all 5 indicators are aligned at the same time.

Rather than having a monthly recurring charge like other signals providers, Auto Binary Signals provides access to their signal software for a one-time payment. This software tracks all major currency pairs, commodities, and a few stocks. Auto Binary Signals provides two different types of option ranges: short-term (1-5 minutes) and long-term (15 minutes to 1 hour).

Overall, this signal provider has its pros and cons. It’s win rate appears to be very high, but the fact that it doesn’t send you alerts to your smartphone or email in real-time can lead to missed trading opportunities.

Signals 365

​​​Signals365 is a ​signals provider that provides over 100 daily signals across 8 major currency pairs including EUR/USD, GBP/USD, USD/JPY, USD/CHF, EUR/GBP, AUD/USD, NZD/USD, and EUR/JPY. These trading alerts are accessible 24/7 through their web-based platform. Each signal includes data such as Asset, Expiry Time, Entry Time, Strikeprice, and Market Direcition.

​​Unfortunately, Signals365 does not send binary option signals via SMS or email. They can only be viewed in your members area once you login. According to their website, their signals are generated using proprietary technology that predicts trends and price reversals. Their automated trading strategies have gone through extensive backtesting and optimization over the years.

In order to maximize your win-rate and avoid poor market conditions, Signals365 pauses their signals during major economic events, public holidays, and low trading periods.

Signals365 does not charge for their signals. Instead, their service is free, as long as you sign up to one of their preferred brokers.

Types of Binary Options Signals

Basic Signals

Basic signals are easy-to-follow notifications communicated to traders directly and in real-time by SMS or email. Basic signals are the most simplistic form of signals and don’t necessarily provide the in-depth explanations or charts that other signal types may provide.

Basic signals will advise traders on the direction of trades and suggest whether a trader should “put” or “call” on a trade. Because they’re not as complex as some other signal types, basic signals enable traders to make quick decisions that can often return highly profitable results.

Free Signals

Many signals services will entice new users to their service by offering free binary options advice. While it’s a good way for inexperienced traders to test a service or understand how binary options signals operate, free signals are unlikely to provide profitable advice. Like demo accounts, free signals are a risk-free foray into how ​trading binary options ​work without trading real funds before you’re ready.

Signals Software

Working closely with an account manager through a broker provides extensive benefits traders may not find working on their own. However, signals software offers real-time notifications and keeps track of signs a human might accidentally miss.

There’s no shame in using signals software to stay on top of the best binary options trades of the day; many professionals utilize the software, as well.

Factors to Consider When Choosing A Binary Options Signal Provider

Success Rate

Before choosing ​the best binary options signals service, it’s important to investigate the success rate of the provider. Signals services such as Signals 365 and Auto Binary Trader prioritize transparency and publish their daily results to their website. By publishing the good and the bad results, these signal providers maintain trust in their traders.

It’s typical for signal​s providers to boast 70% or higher success rates, but there is no way to investigate these claims if the provider is not transparent about their results.

Number of Signals and Frequency

​Binary options signals aren’t worth much if traders don’t have access to them. Before choosing a signals service, consider the frequency in which the provider will send signals to you, the hours they operate, and the number of signals they’ll send at any given time.

The signals should be frequent and quick, enabling you to make the best trades before the trade window expires. Fully automated signals services will send frequent signals, but they may lack some of the accuracy of signal​s providers that combine software with human insight.

​Binary options signals providers enable traders to make quick decisions that produce highly profitable results. The frequency and number of signals sent can affect profitability. Traders may want to look for services with higher update rates.

Price

Traders also need to take the cost of binary options signals into account. Similar to brokers, signal ​providers may offer a variety of tiers to their traders. Before committing to a signals service, traders should compare and contrast what each service provides for the price.

Because all binary options trades come with a degree of risk, traders must also factor in the frequency of signals and the success rate of the signal ​provider and compare these factors with the cost. If the success rate is too low and the updates are not frequent enough, a higher priced service may not be worth as much to traders.

Trial Available

Before choosing your signal ​provider, it’s worth looking into whether or not the service offers a trial before you subscribe. Signal service trials may not yield high profits for traders, but will provide insight into how the service operates, how quickly it alerts traders of changes in trends, and how beneficial the advice may be to the trader’s bottom line.

Delivery Method

​Some signal service providers differ in how they alert traders of important signals. Some ​binary options signals only deliver signals while a trader is specifically logged on to their app or website. That means the trader could miss important alerts. Other services readily update traders of signals via SMS, email, skype, GroupMe messages, and app-notifications in real-time.

It’s crucial to consider the delivery method of notifications when choosing a ​binary options signal provider. No matter how good the data is, it doesn’t mean much if traders can’t act quickly on the information.

Robert Wolfe is the founder and chief editor of Impact Investing Collaborative. Robert is an expert trader with over 10 years of experience trading binary options, Forex, and CFDs. He prides himself in providing accurate and in-depth reviews in order to help others find a trading platform that fits their needs. When Robert isn’t actively trading or managing Impact Investing Collaborative, he enjoys spending time with his 3 kids, playing golf, and spending time outdoors.

Welcome To Our Site!

My name is Robert Wolfe and I’m an online trader with over 7 years of experience trading financial instruments such as binary options, CFDs, forex, and stocks. I created this website to share my knowledge of the industry so you can avoid the same mistakes I’ve made.

Best Binary Options Brokers 2020:
• Binarium

Best Binary Options Broker 2020!
Good Choice for Beginners!
Free Trading Education, Free Demo Account!
Get a Sign-Up Bonus Now!

• Binomo

2nd in our ranking!