Oscillator indicator for binary options

Bill Williams is credited with creating this oscillator indicator that has become quite popular, and comes included in most trading software packages.

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Bill Williams trades exclusively with stocks, but its simplicity and ease of use helped it gain a following among forex traders. Also, the way the signals are structured, it is especially convenient for binary options traders.

Since the creator gets to name their own system, Williams naturally chose the most awesome name he could think of.

How does it work? The Awesome Oscillator works by showing market momentum in what is called a histogram a series of bars on the bottom of the screen.

In the graph, the blue line is the 34SMA and the red line is the 5SMA. Momentum is indicated in the color of the bars: When the shorter average is above the trend, the bars are above 0; and when the red line is below the blue, the bars point downwards.

This is what the Awesome Oscillator looks like when applied to the same chart:. How to use the Awesome Oscillator: The simplest way is to wait until the histogram crosses through the 0 line also called the Naught Line.

If it crosses from the bottom going up, the market is expected to be going up; while if it crosses going down, then the market is expected to keep going down. For example, if the market is moving down, it will be below the 0 line.

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You wait until there are two green candles followed by another red one. This usually means the market will continue down, and is an excellent time to sell short or buy a put. The same works in the other direction; except the bars are above the line, and you are looking for two red ones followed by a green.

Note that the market is going down histogram is below the line , and then goes through a correction before dropping lower. Once you get the first green candle, then you have a buy signal. If you were trading binary options, this would be the time to buy a call. The same works in the other direction, except with the colors reversed.

A sell signal is generated when you reach a second, bigger hump and then you get a red candle. If you are tracking the market on an hourly time frame, you should wait until the full hour is over before getting into the market.

The other thing you might have noticed in the bigger chart up there is that there is a large move upwards around the middle of the chart. How to use this indicator in your strategy: The advantage of this indicator over a lot of others is that it provides more signals.

This is ideal for a trader who wants to get into the market a lot, and for binary options traders. The Awesome Oscillator will then show when the market is trending in a certain direction and let you take a series of options while the momentum lasts.

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