Binary options technical analysis software

Binary Options Charts – Free Charting.

Binary options charts have not always been of high quality when delivered direct from brokers – as discussed in more detail below. That is changing however, particularly with established CFD and spread betting brokers entering the binary options market.

Live Binary Options Chart.

Brokers with Charts.

Some brokers now offer high quality binary options charts for traders, and ETX Capital and IQ Option also deliver MetaTrader 4 integration.

Where to get more charting.

If you have used any of the binary options broker platforms, or you are just a beginner who has looked around one or two of the platforms, one thing will stand out in a glaring fashion: the absence of interactive charts. Charts are the mainstay of technical analysis in the binary options market. Without charts, there would be no analysis of assets for trading opportunities, and without analysis, the trader would essentially be gambling.

It is important for the trader to know where to access charting tools for trade analysis, as these will provide the trader with information for an informed trade decision when trading binary options assets. In this piece, we will identify some places where traders can get charting tools in order to analyze the markets and trade profitably.

Charts Explained:

Chart Sources.

Chart sources are of two types:

a) Online charts are web-based charts available from the websites of certain brokers and software vendors. These charts generally do not provide a lot of flexibility in terms of interactivity and the tools that can be used with them. For the purposes of binary options trading, it is not recommended to use online charts.

b) Downloadable charts as the name implies, can be downloaded either as part of forex trading platforms or as software standalone plug-ins. They are the best for the purposes of analysis of assets for binary options trading since they come along with many tools that augment the results of analysis. They are the recommended chart software for binary options analysis.

Some of the charting sources will provide free access to the charting tools. There are some which are free but will require some paid plug-ins to work, and there will be those that come in a complete package that has to be paid for 100%. Some of these charting sources for downloadable forex charts that are used for binary options analysis are as follows:

FreeBinaryOptionsCharts has an easy to use (and free) binary options chart. They also have a great guide for beginners about how to use binary options charts. This is Mifune’s site and so the quality of the strategy articles is very high.

Developed by Chris Craig and available for a free download from Softpedia, the Forex Charts Widget v1.7 is a downloadable chart software that allows the user to view the currency charts for several pairs. The user will have the ability to choose the time frame and apply a set of indicators that come with the plug-in.

Probably the best source for free charting information and interactive charts is the MetaTrader4 platform.

This platform is available from almost every market maker broker in the forex market that there is. However, there are a few worth mentioning due to the fact that they have a more comprehensive asset base that matches the binary options asset index.

Ideally, you should download the MT4 platform of a broker that has more than 40 currency pairs, all the major stock indices (or at least 8 of them), stocks and the spot metals (gold and silver, sometimes listed as XAUUSD and XAGUSD respectively).

Examples of the MT platforms that you should use for your charts are those from FXCM, FxPro, Finotec and Forex. Virtually everything that you need for charting is found on these platforms. The best part is that it is all free and can be obtained when you download the MT4 platform and create a demo account. Another beautiful factor that works in the MT4’s favour is that the MQL programming language on which the platform was built supports the building of EAs, indicators and software plug-ins that aid in signal generation. These signals can then be exported to the MT4 platforms. Check out our MT4 guide in the forum for more info here or watch this video which explains some tips and tricks for MT4:

c) Interactive Brokers Information Systems (IBIS)

The word “interactive” in this broker’s name says it all. Interactive Brokers has one of the most comprehensive charting platforms for technical analysis. The Interactive Brokers Information System (IBIS) platform provides institutional level charting facilities. The charting facilities on IBIS boast of 22 configurable technical indicators, an alert wand that supports alert creation, and allows traders to use any of the three chart types (bar chart, line chart or candlesticks). The package comes at a cost though. Users have to subscribe to its use at a cost of $69 a month.

This forex charting service from OFX allows traders to conduct lines studies, use indicators, etc. This software is not downloadable, but is a Java-enabled web-based application that allows users to switch between basic charts and advanced charts. This charting software is coded with EasyLanguage, which is the programming language that powers FXCM’s TradeStation, so you can also use it as a software plug-in on FXCM’s flagship trading platform.

Multicharts is a downloadable chart software that provides high-definition forex charts on 30 different currency pairs in partnership with TradingView. The charts also have a web-based version. Traders can utilize several time frames that span from one minute up to one month. Developed by MCFX, the MultiChart charting and trading platform is a robust package that even has a unique ODM chart trading feature that zeroes down on the exact price that a trader wants to execute his trade on, tags it and uses this information to remind the trader about the trade if there is a lag in time between signal generation and trade execution.

Nuff said. Click here for free stock charts. (Go To “Help” in FreeStockCharts and view the video tutorial, it is very helpful for beginners.) Looking for Candlestick view on fsc, go to top left of chart and click on Price History in green then click Edit, then change the “Plot Style” from HLC Bars to Candlestick and click “OK.”

There are many other sources of charting information for use in generating binary options signals. It is up to the trader to decide on which one to use based on cost, ease of use and other parameters tailored to taste.

The Most Important Technical Indicators For Binary Options.

Consider the following bets:

Pay $45 to bet that the price of gold will be above $1,250 at 1:30 p. m. today. Get $100 ($55 profit) if you win, lose $45 otherwise. Receive $81 now to bet that NASDAQ US Tech 100 index will go below $2,224 at 2 p. m. today. Keep a profit of $81 if your prediction comes true. If it does not, lose $19. Pay $77 to win $100 if the USD-JPY forex rate goes above 78.06 at 2 p. m. today; you lose $77 if it does not. Gain $33 if you bet on the price of bitcoin will go below $379.5 at 3:00 p. m. today. If it doesn't drop that much, lose $67.

Welcome to binary options. All or nothing, one or zero, these securities are available on Nadex and the Chicago Board Options Exchange (CBOE). Binary options allow traders to make time-bound conditional bets on predefined values of stock indices, forex, commodities, events, and even bitcoin values. Like a standard exchange-traded option, each binary option has an option premium ($45, $81, $77, and $33 in the examples above), a pre-determined strike price ($1,250, $2,244, 78.06, $379.5), and an expiry (1:30 p. m., 2 p. m., 3 p. m. today).

The differentiator is the settlement price that remains fixed at $0 or $100, depending on the option condition being fulfilled. It keeps the net profit (or loss) fixed. The option premium also remains between $0 and $100. (Related: Guide to trading binary options)

Since binary options are time-bound and condition-based, probability calculations play an important part in valuing these options. It all boils down to “ what is the probability that current gold price of $1,220 will move to $1,250 or above in the next four hours?“ The determining factors include:

Volatility (how much and is it sufficient to cross the threshold/strike price?), Direction of the price move, and Timing.

Technical indicators suitable for binary options trading should incorporate the above factors. One can take a binary option position based on spotting continued momentum or trend reversal patterns. Let’s look at some of the popular binary option technical indicators:

Wilder’s Directional Movement Indicators (DMI) Average Directional Index (ADX): Composed of three lines, namely ADX, DI+, and DI-, and their relative positions, this indicator aims to capture the strength of an already identified trend. Here is the table for interpreting the trends:

Weak, Unsustainable Uptrend.

Weak, Unsustainable Downtrend.

Here is an illustration, using 3M Company (MMM) stock:

Image courtesy StockCharts.

Depending upon the identified momentum and trend strength, an appropriate buy/sell position could be taken.

Pivot Point (in conjunction with support and resistance levels): Pivot point analysis helps determine trends and directions for any given timeframe. Because of the flexibility in timing, pivot points can be used for binary options, particularly for trading highly liquid major currencies. A good example (with calculation and graphs) is included in the article Using Pivot Pointsin Forex Trading. Commodity Channel Index (CCI): The CCI calculates the current price level of a security relative to the average price during any given timeframe. The average price level is usually the moving average. Time periods can be selected as desired, allowing the trader flexibility in choosing when a binary option expires. The CCI is useful in identifying new trends and extreme conditions of overbought/oversold securities. It is very popular among day traders for short-term trading and may be used with additional indicators such as oscillators. The CCI is computed with the formula:

"Price" is the asset's current price, "MA" is the moving average of the asset's price, and "D" is the normal deviation from that average.

High values above +100 indicate the start of a strong uptrend. While values below -100 indicate the start of a strong downtrend.

Stochastic Oscillator : In an interview, the creator of the Stochastic Oscillator, Dr. George Lane, said “it follows the speed or the momentum of price. As a rule, the momentum changes direction before price.” This important underlying detail indicates extreme cases of overbuying and overselling, allowing reversals for bullish and bearish phases to be identified.

The crossover of %K and %D values indicate trade entry signals. Although a 14-day period is standard, binary option traders can use their own desired timeframes.

Levels above 80 indicate overbought, while those below 20 indicate oversold.

Bollinger Bands : Bollinger bands capture an important aspect of volatility. They identify upper and lower levels as dynamically generated bands based on recent price moves of a security.

Commonly followed values are 12 for simple moving average and two for a standard deviation for top and bottom bands.

Contraction and expansion of the bands indicate reversal signals that help traders take appropriate positions in binary options. Overbought situations are indicated if the current market price (CMP) is above the top band. While overselling is indicated when the CMP is lower than the lower band.

A challenge in binary option trading is correctly predicting the sustainability of a trend over a given period. For example, a trader may take the right position for an index, predicting it would hit 1250 at the end of a five-hour period, but the level was achieved in the first two hours. Constant monitoring is needed for the rest of the three hours if the trader plans to hold the position until expiry, or a predetermined strategy should be executed (like squaring off the position) once the level is reached.

The technical indicators discussed above should be used for timely actions with constant monitoring. One major disadvantage with technical indicators is that the results and calculations are based on past data and can generate false signals. Traders should practice caution with detailed backtesting and thorough analysis for high-risk, high-return assets like binary options.

Options Analysis Software.

When searching for options analysis software, the name of Calibrex comes on top of the list because of its user friendliness and simple yet comprehensive features. This is a financial tool that has been powered by Microsoft excel and provides add-ins into your regular excel sheet so that users are able to calculate complex derivative values, cash instruments transactions and other sophisticated calculations within seconds. It is best suited for traders and portfolio or fund managers who need analysis of data at all times to make accurate decisions. Calibrex supports features of both single valuations of instruments as well as complex risk management calculations.

Financial Trading System.

Software usually do not come in with a user guide. The financial trading system on the other hand is one of those few options analysis software that has a full and thoroughly helpful user guide to ensure that new users are not lost while going through the interface. The software brings strong analytical tools and graphs at your fingertips and provides you with a written summary of the analysis as well to facilitate new investors who are not aware of the technical terms associated with trading.

MicroHedge is a comparatively new options analysis software tool but it provides you with the best analytical analysis with regards to risk and portfolio management. It is compatible with quote Binary Options Trading Platforms, which allows the software to present an analysis of the derivative securities as well. MicroHedge is best suited for serious traders who like to plan their moves well ahead of time.

Open Interest options browser.

A very comprehensive options software analysis tool, open interest options browser downloads data related to alpha, gamma, delta, days to expiry etc. from various authentic CBOE web links and turns it into graphs and charts for you to view and understand the trend. This software is a must have whether you are an experienced trader or you are new to the field.

Options Analysis Software is an all in one package that provides a detailed analysis of the security; right from valuation, profit and loss graphs, volatilities, Greeks to probabilities and prediction of the market trend. The analysis is not only limited to securities but also is also available for indices, stocks and even commodities. Optionstar can be considered as the broadest software for portfolio managers, traders and even brokers. It is currently being used by thousands of people all around the world and it has generally received positive response from all the users.

The Fiat financial systems have come up with exceptional options analysis software, which supports future contract analysis as well. Best suited for traders, the FIAT financial systems website also provides the traders with buy and sell recommendations based on technical and economic indicators. Apart from this, strategies about profit maximization as well as special charts and graphs for option contracts and trading positions can make the decision-making process easier for old, new and experienced traders.

What are the best charts for binary options?

The biggest handicap of all binary options-broker is for sure the charting-tool. But in this context, it is not quite fair to talk of a handicap since the platforms are simply not intended for conducting extensive analyses. Generally, the platforms are designed for trading and placing the orders - the broker serves as a middleman between market and trader.

Traditionally it is distinguished between binary options and cfd/forex platforms. This needs to be revised as there is a growing number of platforms that offer both. So in case you think that the charts for binary options are weak, you have to think again. And maybe take a look at such a broker. Our favorite is IQOption with the very best software when it comes to technical analysis. You can open up to 9 charts in one screen and add different indicators to each of them. There’s no better way to trade professionally!

RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK.

Professional chart software.

So, if you really take options trading seriously, you should look out for a charting alternative. Here, you also have got many choices and alternatives because a lot of tools are free of charge but equipped with extensive functions. You can choose from the following opportunities that are free of charge:

FreeStockCharts.

The first opportunity we want to introduce to you is the website freestockcharts. There, you find an amazing online-tool that leaves nothing to be desired. But, of course, with restrictions because you cannot query German shares with this service. In return, these charts are perfect for analysing currencies and resources, too.

As you can see on the screenshot, everything is structured very easily. With a little bit of practice you have rapidly got used to your environment and nothing is going to stop your analyses.

Etoro is a forex broker that also offers a free demo account. So, if you open such a demo account then you also have access to the charting-tool of eToro and to the live courses. The advantage of this platform is that it is immediately available online and therefore, you don’t need to install any external software. The disadvantage is that with this tool, you cannot do as much as with an extensive software. But, for 99 % of all traders, it is completely sufficient.

(Trading involves risk)

On the screenshot, you can see that also this platform is very simply structured and easy to use. We also provide detailed instructions in German.

Metatrader.

Let’s come to another opportunity: Metatrader. Metatrader is a software package you need to install on your PC. It offers very extensive functions and ways to analyze and there is hardly anything the metatrader is not able to do. You can even develop your own little trading program which automatically trades for you. But just in combination with a forex - respectively with a CFD broker. At the moment, when trading with binary options this is not possible yet. The metatrader is offered by many forex brokers and when opening a trading account you will get the program free of charge.

As you can see on the screenshot, the metatrader is structured in a bit more complicated manner. But, with a little training period you can also handle this tool without any problem. Professional traders as well love the metatrader and have it in action very frequently.

Line-, candlestick and bar-charts.

Let us come to the next question: Which charts should you use? Most of the trading newcomers preferably use simple line charts, particularly because of the clarity and maybe they do not know any other alternatives. Unfortunately, line charts are relatively unsuitable for most of the analyses because a lot of information gets lost. Only the final courses of a time unit are incorporated - you don’t know what happens within the time unit.

Bar-charts are much more meaningful. They consist of single bars that show the highest, the lowest, the opening and the end course. One bar shows one time unit. On a day chart, one bar stands for a whole day. On a five minutes chart, one bar stands for 5 minutes.

Candlestick charts.

Nowadays, candlestick charts are very common.

Actually, the information is the same as in a bar-chart, just differently shown on the graphic. Therefore, candlestick charts are easier to capture from the unpracticed eye, too.

The single candle consists of wick, fuse and body.

Wick and fuse mark the highest and the lowest course.

The body describes the opening - and the end course. One candle can show different time periods, just as with the bar charts.

Usually, the candles are shown in colour, depending if the course in the respective time period has risen or fallen. Because of the dominant body especially the interval between opening and end course is emphasized. Therefore, candlesticks are particularly suited for those markets where this interval is very important, e. g.,in stock markets. In markets where people trade around-the-clock e. g. in the forex market, bar-charts often make more sense.

All in all, it is just a matter of taste which chart you should choose.

Which chart should you use now?

If you still use line charts then you should break now with your habit and change immediately.

Line charts are just unsuitable for the analysis.

Of course, this does not apply without exception , because if you consider a very long time period, then, a line chart is definitely sufficient.

If you should choose bar-chart or candlestick chart is completely your decision.

From an unpracticed eye, often candlesticks are easier to capture than bars. With a little bit of practice you also keep track with a bar chart.

IQ Option is one of the most reliable and secure brokers and a safe haven for all traders. This broker is regulated by CySEC and offers options for as low as $1, plenty of stock options and a great trading platform!