MACD Indicator can be used for trading binary options. The MACD indicator is a momentum indicator that illustrates the relationship between two moving averages.

The MACD indicator uses the relationship between a shorter moving average of the market prices and a longer moving average of prices to discern the momentum of a trend movement. It is derived by deducting a 26 days exponential moving average (EMA) from a 12 days EMA. To act a trigger for a trading signal, a 9 days EMA is then plotted over the MACD. The graph diagram below shows an example of what a MACD and signal line will look like.

macd-binary-options

How To Use MACD In Binary Options Trading ?

  • Buy – When the fast line crosses the slow line from bottom to top.
  • Sell – When the fast line crosses the slow line from top to bottom.

The strategy based solely on MACD signals might be suitable. In this case, you could trade any selling or buying signal with High/Low options, for example. To apply a strategy like this, make sure to choose the expiration time for your options according to your chart’s time frame. Otherwise, signals might be invalid by the time your options expires or will not have had enough time to create the movement you have invested in.

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