What are binary signals?

quantum signals sent to mobileBinary signals are trade alerts optimized for short term binary options trading. They can be delivered via emails or phone notifications.

Unfortunately, many users who begin their journey into binary options do so without any guidance from financial advisors or professional traders. They more often than not rely on their luck, rather than financial analysis.

It is important to recognize that every financial advisor and trader relies on some type of signal before they invest their money. These signals may range from simple technical indicators running on a chart to a very complex financial analysis, which will include fundamental and technical analysis.

What do binary signals look like?

binary signals exampleMost binary signals contain enough information for the inexperienced trader to place a trade using any binary broker. Good binary signals will specify the following information:

  • the traded asset (EURUSD, GBPUSD, JPYUSD, GOLD, COPPER, etc.)
  • time and price of trade entry (usually same time the signal is generated)
  • prediction of the direction of the asset (usually indicated by words such as UP/DOWN or CALL/PUT or BUY/SELL
  • expiry time

One of the major differences between Forex and binary options signals is that in Forex there is usually no expiry time given as positions are not bound by time and can be left opened for longer if required.

So how are binary signals generated?

trader looking for trading signalBinary signals can be generated by traders who analyse the market in real time and send a manual signal to subscribers. These are often professional traders who look at the charts and analyse the price action of an asset and compare it with its historical data and sometimes also current world events and price correlations.

Please note that signals generated by real professional traders have a higher success rate than those generated by automated software. In addition to sending quality signals, most traders also offer guidance to novice traders which can also be very helpful.

The other way to generate trading signals is by using automated software which may include indicators and trading robots. Automated software analyses the market in real time and issues automated signals when certain market conditions are met. These conditions are pre-programmed and the generation of signals is automated.

These signals, however, will not trade for you. The fact of the matter is that any automated signals must be confirmed by a trader.

How to confirm a binary signal?

candle sick patternsThe best way to confirm binary options signals is by looking at the price action patterns and candle stick patterns such as pin bars and support and resistance levels.

No software and no programming can predict the market at 100% success rate 24/7. It’s simply impossible to program for the unpredictable and volatile nature of the market. As result, some signals, whether automated or done with the help of a professional trader, will be wrong. This needs to be accepted.

The best advice for any novice binary options trader is to learn how to look at the price action and learn the most useful price action patterns and how to spot main levels of price support and resistance.

More information on binary signals and comparison of signal providers.

 

 

Published in Education

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