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Mutual Funds & Trading

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Infinitum Wealth
Mutual Funds & Trading

Mutual funds and trading always go hand in hand in the market. Mutual fund SIP advisor, are very common and important to know about the details of insider trading and more. Mutual fund SIP advisor can be also hunted online and can help you with the details of all about trading. After having our conversation regarding the similar topic and after a consultation with several mutual fund SIP advisor, below are discussed the various technical indicators in the field of trading.

 

There are many technical indicators traders who work by depending on their trading style and type of security to be traded on. Technical indicators are mainly used in short term trading which helps the trader to decide

 

  • the range of movement.
  • The direction of the move.
  • The duration of the move.

 

Options Trading: Options trading is basically a contract that enables an investor to buy or sell any basic asset or instrument at a specific price given over a period of time. The buying and selling of the options depend upon the options market which mainly trades contracts which are based on securities.

 

Technical Indicators: A technical indicator in finance is an analysis of mathematical calculations that are based on historic price, volume, and open interest information which aims to predict the financial market direction.

 

Now, every trader has a common question: which indicators are best for binary options trading giving the best results. Below are some of the top technical indicators for options trading, also used for binary options trading? They are as follows:

 

  • Relative Strength Index: It is a momentum indicator that compares the magnitude of recent gain and losses occurred over a specified period of time which is used to measure a security’s speed and the change of price movements striving to determine the overbought and oversold conditions.

 

  • Bollinger Bands: The Bollinger bands are mainly used to measure the volatility of a trade. The bands expand as the volatility increases and contracts as the volatility decreases. As the price moves closer to the upper band, the more the overbought security can be and as the closer, the price moves towards the lower band, the more oversold it can be.
  • Intraday Momentum Index: Intraday momentum index is a technical indicator that is used mainly for high-frequency option traders who mainly look to bet intraday moves. It basically combines the concepts of intraday candlesticks and relative strength index, therefore providing a certain range for intraday trading by indicating overbought and oversold levels. Using this indicator the options trader may be able to gain a potential opportunity to start a bullish trade in an up-trending market or start a bearish trade in a down-trending market at an intraday price.

 

  • Money Flow Index: It is a momentum indicator that combines price and volume data and is also known as a volume-weighted relative strength index. It basically measures the inflow and outflow of money in an asset over a specific period of time which is basically an indicator of ‘trading pressure’.

 

 

  • Put-Call Ratio Indicator: This indicator basically measures the trading volume using the put options against the call options. Rather than putting the absolute value of the put-call ratio, the changes in the value indicate an overall change in the market sentiment.

 

  • Open Interest: The open interest mainly indicates open or unsettled contracts in option. It does not always indicate a specific uptrend or downtrend, but it surely provides indications in relation to the strength of a particular trend.

 

There are many other indicators also available which are used in trading options, but these were some of the most commonly used, having smooth techniques and giving valuable results. Therefore, an options trader should always select the best suitable indicator according to his/her trading style and strategy.

 

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