Being able to navigate volatile markets effectively and lucratively can take years’ worth of practice, study, and honing analytical skills. Binary Options Brokers and traders spend many sessions referring to multiple charts, advisory software, currency pairs, and other various lagging external indicators. However, the mark of a seasoned and strategic broker is not how many indicators they choose to use to assess the market; but rather, how much they can benefit and glean from only using a choice few.
An effective and fairly non-convoluted practice is by using the Envelope Indicator. This trading strategy whittles the entire trading process down to studying a few key factors in a restricted time frame. This method is reliable for producing solid, lucrative results and can be employed successfully with the proper risk management techniques.
This technical indicator is typically a product of two moving averages and a point of confluence. The averages in question outline both upper and lower price range levels on the chart of a tradable asset. Brokers primarily use this technical indicator to assess whether a market is overbought, or oversold, and take positions and put or call orders accordingly.
A moving average envelope indicator, on the other hand, is a dynamic average of high and low inflection. In order to use this strategy, a broker must first calculate and draw up levels of support and resistance.
This indicator hinges on selling and buying signals; if the market is overbought, the price will reach the upper band and this will signify the sell signal to the broker. Likewise, if the market happens to be oversold, the price will reach the lower band and signify the buy signal to the trader.[Continue Reading…]