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Trading binary options with the MACD indicator
MACD (Moving Average Convergence Divergence) is one of the most widely used indicators that many binary option traders like to use in their technical analysis. To add MACD to the chart above simply click on the Indicators button in the top navigation panel and choose MACD from the drop-down list. his particular oscillator indicator was developed by Gerald Appel as a way to signal trend changes and indicate the direction of the trend. As you can imagine this can be very useful in binary options trading.
The MACD indicator has two lines that show diffirent moving averages in relation to a zero line (middle line). The blue line is the Fast MACD and the orange line is the Slow MACD. When the Fast line crosses from the above to below the Slow line but both lines remain well above the middle line (which also shows a trend change) it may be a good SELL signal. When the Fast line crosses from below to above the Slow line and both lines remain well below the middle line it is a BUY signal. The illustration (EUR/USD, 5 minute time frame) clearly shows both examples. You can also see how the price action touches the Bollinger Bands at entry points which correlates with the MACD signals.
So if youre looking at 5 minute time frame it means that each candle is 5 minutes. When you recognize a MACD signals on 5 minute chart you should probably enter a trade with expiry time of 15 minutes up to 1 hour.
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