Binary Option Robot can receive signals from 6 different trading indicators.
How trading signals are generated
If multiple indicators are selected they should be in correlation for a signal be generated. For example if RSI and MACD are selected, the two signals have to be PUT signals for giving to the robot an indication to execute a PUT trade. Also the two signals have to be CALL signals for the robot execute a CALL trade. If the RSI provides a CALL signal and the MACD provides a PUT signal the robot will not execute any trade. The indicators that give best signals are MACD and RSI.
Direction of the Market
The trend is the most popular indicator in trading, this indicators will always offer a buy or sell signal depending on the evolution of the market based on past rates.
Relative Strength Index
The RSI is based on the magnitude of recent gains and loses, a RSI signal is provided when there are many gains closes rates compare to low loses closes rates (overbought situation) or when there are many loses closes rates compare to gains loses closes rates (oversold situation). The overbought situation will give a PUT signal and the oversold situation will give a CALL signal.
Commodity Channel Index
The Commodity Channel Index analyze the relationship between the current rate, the moving average, and the normal deviations from that moving average. It will determinate if the currency pair is overbought or oversold. The overbought situation will give a PUT signal and the oversold situation will give a CALL signal. This indicator is perfect to be coupled to an oscillator indicator like MACD, Williams %R, RSI or Stochastic.
WILLIAMS %R Indicator
The Williams %R is similar to the stochastic oscillator. It compare also the closing rate with the average rate over the period. The overbought situation will give a PUT signal and the oversold situation will give a CALL signal.
Moving Average Convergence Divergence
The MACD is based on moving averages, a MACD signal is provided when two moving averages with different periods cross each others. Binary Option Robot uses the 20 period Moving average (MA20) and 50 period moving average (MA50). When the MA50 cross over the MA20 it produce a PUT signal and when the MA50 cross under the MA20 it produce a CALL signal.
The Stochastic Oscillator compares the last closing rate with the price range of a given period. If the last closing rate closes near the high of the period it will generate a PUT signal, if the last closing rate closes near the low of the period it will generate a CALL signal. As the RSI indicator the stochastic oscillator is made to identify overbought and oversold situations.