The Binary Options Arrow Indicator delivers real-time buy/sell signals based on the recent changes in price actions. It applies crossovers between 5 and 200 EMA and filters the trend signals with a 12-period RSI.
Below the candle’s low, the bold green arrows signal an upcoming bullish trend. Conversely, the red arrows above the candle’s high indicate the market trend will turn bearish in the near future.
Binary Options Arrow is a simple MT4 trend indicator suitable for beginners in options trading. It doesn’t signify entry and exit levels.
So, you can consider additional charting tools like support/resistance for determining key price levels and anticipate the buy/sell zones accordingly.
Buy Signal Generation with Binary Options Arrow Indicator
In the above example, when the green arrow appeared below the candle, the price was still consolidating by plotting multiple inside bars. It is ideal to wait for further price actions before entering an order in such a complex market condition.
We’ve decided to go long once the price plots a bullish breakout above the current candle’s high. Place the stop-loss limit right below the recent swing low of the market. Also, consider an exit once your profit turns double compared to your budgeted loss for any particular entry.
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Sell Signal Generation with Binary Options Arrow Indicator
When the indicator delivers the red arrow signal above the price bars, look to go short. Since the Binary Options Arrow Indicator doesn’t highlight the key price levels, we’ve manually added a horizontal support level in the above chart.
Even though the indicator delivered an early red arrow signal hinting at an upcoming bearish trend, we’ve waited for a further confirmation for entering short.
Once the price plots a bearish breakout at the current support, it validates the recent bearish trend signal of the indicator and comprises enough assurance for going short.
Place the SL above the recent price swing high, and target an exit with a minimum 2R profit compared to the risks.