Technical analysis makes use of many trading indicators. For further information you may see here. The examples of these indicators are Bollinger bands and moving averages. These are technical analysis tools that are used by the binary trading software as well.
When you trade using the automated trading software, these generate trading signals based on an in-built algorithm. The technical indicators are used to analyze the past of the asset and then predict its price trend in the future. The indicator is also used to understand the patterns in the market.
There are two broad categories of study in the market which are fundamental analysis and technical analysis. Fundamental analysts study the annual reports and the economic reports of the asset. The technical analysts read charts and use the indicators to understand the direction of the market. The technical indicators are thus used to generate opportunities in trading.
Moving average crossover is an important indicator that is used in technical analysis. A crossover of two moving averages is used to denote a change in trend. Two moving averages of different time periods are applied on the chart and this helps the trader identify when there is a change in the trend.
The indicators are also used to come up with trading strategies. These strategies use the indicators to determine where the entry and the exit of the trade should be. The technical indicators are also used to manage the trades.
A strategy is nothing but a trade plan and these are some defined rules that set out the condition when a trade should be taken. It will let you decide how should the trade be managed, established and closed. Strategies use the technical indicators a lot and at times you may also have to use multiple indicators to develop a strategy. These indicators are used to generate high probability trading signals.
Today, there are many technical indicators used by traders. Common ones are stochastic oscillators, moving averages and MACD. There are many proprietary indicators as well that are not available commercially. Some traders may have their own indicator that is unique which they design with the help of a programmer. These indicator sallow you to input variables which let you decide how long you would want to go back.
Moving average is a popular technical indicator used by the binary trading software. It is nothing but the average of the price in a particular time period. The time period should be specified. So suppose you choose to plot the moving average for 50 days then the indicator will be plot using the last 50 days average closing price of the security.