MACD AND RSI GOOD FOR TRADING REVERSAL

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One of the best indicators I used in trading reversals is MACD paired with RSI.

What Is Moving Average Convergence Divergence (MACD)?

Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. The result of that calculation is the MACD line. A nine-day EMA of the MACD, called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals. Traders may buy the security when the MACD crosses above its signal line and sell - or short - the security when the MACD crosses below the signal line. Moving Average Convergence Divergence (MACD) indicators can be interpreted in several ways, but the more common methods are crossovers, divergences, and rapid rises/falls.

REMEMBER:

• MACD is calculated by subtracting the 26-period EMA from the 12-period EMA.
• MACD triggers technical signals when it crosses above (to buy) or below (to sell) its signal line.
• The speed of crossovers is also taken as a signal of a market being overbought or oversold.
• MACD helps investors understand whether bullish or bearish movement in the price is strengthening or weakening.

The Formula for MACD:

$\text{MACD}=\text{12 period EMA - 26 period EMA}$

MACD=12 period EMA - 26 period EMA



MACD is calculated by subtracting the long-term EMA (26 periods) from the short-term EMA (12 periods). An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average (SMA), which applies an equal weight to all observations in the period.

What Does MACD Tell You?

The MACD has a positive value whenever the 12-period EMA (blue) is above the 26-period EMA (red) and a negative value when the 12-period EMA is below the 26-period EMA. The more distant the MACD is above or below its baseline indicates that the distance between the two EMAs is growing. In the following chart, you can see how the two EMAs applied to the price chart correspond to the MACD (blue) crossing above or below its baseline (red line) in the indicator below the price chart.

In here I used MACD to enter a reversal trade.

As you have seen on the chart below, my confirmation to trade a reversal is the MACD labeled #2 and the RSI labeled #1 and the candle stick pattern labeled #3. The lines on the chart presents the Other indicator as HIGHER HIGHS green line and LOWER LOWS red line and the blue and yellow line is EMAs. 

The RSI has shown an uptrend coming from the level of oversold which is over the 25 line and the MACD line crosses above the signal line. On the MACD indicator, you see the gap between the zero line  with the 2 moving averages presented with a yellow arrow of which is going closer to the zero line determining the volume of the sellers are weakening. On the Candle stick pattern on the chart you see a big green candle and the two next candles are bears which has a lower wicks showing a rejection of the bear market. I entered long trade upon the the 2 EMAs crosses each other. The shorter EMA yellow line crosses above the longer EMA blue line with a 5 minute trade. The result is here, a winning trade.

MACD is often displayed with a histogram (see the chart above) which graphs the distance between the MACD and its signal line. If the MACD is above the signal line, the histogram will be above the MACD’s baseline. If the MACD is below its signal line, the histogram will be below the MACD’s baseline. Traders use the MACD’s histogram to identify when bullish or bearish momentum is high.

Another examples of How to Use the MACD Indicator

Crossovers

As shown on the following chart, when the MACD falls below the signal line, it is a bearish signal which indicates that it may be time to sell. Conversely, when the MACD rises above the signal line, the indicator gives a bullish signal, which suggests that the price of the asset is likely to experience upward momentum. Some traders wait for a confirmed cross above the signal line before entering a position to reduce the chances of being "faked out" and entering a position too early.

Crossovers are more reliable when they conform to the prevailing trend. If the MACD crosses above its signal line following a brief correction within a longer-term uptrend, it qualifies as bullish confirmation. In the presentation below another reversal is made. From a downtrend market as shown on the MACD indicator the 2 moving averages is going closer to the zero line of the MACD until the MACD line and signal line  crosses the zero line and also the histograms are above the zero line confirming a bullish reversal.

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BASIC CANDLE STICK PATTERNS

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Hello! Today I'm gonna discuss to you some candle stick patterns that can help you in finding a good entry in trading. Maybe you are using these patterns now in your trading but it might not as helpful as it should be. Yes, there are some fake signals involving candle stick patterns mostly in binary trading mostly if you are using small time frames like 5s, 10s, and 15s candle stick time frame. I would like to show you an example below.

The perfect hammer seems to be a continuous uptrend because it is a bullish signal. It is recommended to wait for a confirmation on other tools if you are using like MACD, Stochastic Oscillator or RSI to be able to distinguish fake candle stick pattern in the market.. Wait for the next candle to appear before entering a trade. There are so many fake candle stick patterns in binary trading, so beware to enter any trade without having a confirmation tool available in your platform. Learn to use them profitably not by using them for luck because little knowledge is dangerous mostly if you are dealing with binary options. One simple way to identify the direction of the trend is to wait for the next candle to appear.

Anyway, candle stick patterns are helpful to find better entry point as long as you know how to use them properly. It has been used mostly by many traders like me mostly when breakout is coming. It is my best position to trade break outs and enter a trade with some bigger amounts because i know possibly where is the direction of the trend. Say for instance, the trend is a side way uptrend for a long time and I saw a Bearish big candle developing, I'll wait for the next candle if it is a bear candle and my EMAs are meeting towards  each other like the low EMA crossing the higher EMA and also the RSI is over the 75 line of oversold, so with the MACD line is crossing, then it's confirmed to enter for a short position. See the image below how to confirm a going downtrend market.

It really takes time to spot  a good entry, but it is wise to do so for having a profitable trade. In the images below you will find different candle stick patterns that will help you to find entry spots in binary and forex trading.

BUY OR BULLISH CANDLE STICK PATTERNS

SELL OR BEARISH CANDLE STICK PATTERNS

So, even you see these candle stick patterns in your chart, be diligent enough to verify your point of entry, wait for another confirmation before placing a trade. 

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WHAT MAKES YOU NOT HAVING PROFITS IN BINARY TRADING

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In this post I will discuss the difference of trading in Demo account and in Live account. This is the common mistakes that traders did not notice while trading, that's why you can hardly make a profit in binary option. This area in trading is somewhat  to be a hobby of a trader but they separate their emotions in trading between demo account and live trading.

I know you have already experienced this kind of emotion while trading in your demo account. You are so relaxed to place trade even you know the market is doing good for you, in the end you still winning. Why? because you are trading in a safe environment where in no money from your pocket is involved, even you lose everything then it will be just fine because that's only a demo trading. Here is the pick, while trading in your demo account account, you must feel that the money you are trading is a real money that can only survive you for your uncertainties in life. Feel it and be serious, that if you gonna loose all the money will become a nightmare of you throughout of your life. Treat it as your own money, don't mess with it  cause that will reflect when you trade into your real account. My point here is, you are trading with your demo account to find out what strategy that fits your style in trading. If you find that your demo account is just a betting game then you will do the same in your real account, trust me it will happen. So, the purpose of your demo account is to exercise the three keys in profitable trading that will make you grow in and out of your trading world.

Having a demo account is an advantage to familiarize with every system you are going to do in trading to become profitable. You must learn to bring out the giant in you, the superman in you to develop a well structured trading system for you to use in your real account. I told you, emotion is emotion, you cannot remove your emotion 100%, you are still covet with fear and uncertainties but that's a part of a trading process, the only difference is you must know on how to minimize that fear, control of your own self so that you can find a better entry in binary trading. Focus on the other side of the coin not in your fear of losing. In the image below is my demo account for you to see what I am talking here.

and this is my real trading account.

Having said that, insert in your trading plan this one rule, that if you loose 3 consecutive trades you must stop whatever the market is showing you. It is the most effective way to relax, make another start of focus and you will be saved from burning your account. Why? because if you lose many times, your ego will insist you to trade more to recover your losses until your account will turn into zero, believe me. So, in order to cut your losses, please stop trading at your 3 consecutive losses. On the other hand, in your demo account you must practice to win a 7 to 10 wins before a loss. Do that religiously and study your wins and your losses, identify your winning entries and losing entries and that will make you a profitable trader.


Devote some time to study your trades, and do not make an entry upon opening the platform. Observe first the movement of the market, review your trading plan before putting your first trade because that will induce your resiliency in your trading. It will fire start your trading and boost yourself confidence in your every trading session. You must also avoid distraction, close all open social media accounts and focus on your trading only.


I remember one time, my guru told me to study about candle stick pattern and yes i studied them but this did not keep me from being profitable because the market is still the ace in trading. Patterns are just a mathematical equations that draws formation every candlestick found in the market. Really, they appear but not all the time can make you a decision out of it. Learn to study the psychology of the market, then and only then you can have a strong decision to position your winning entry.


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Hope this post can give you another insight about real trading binary option. Please leave a comment below if you have question about my post and i will try to answer to the best of my knowledge.

INDICATORS AND STRATEGIES IN BINARY TRADING

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 In this trade I will illustrate all the connectivity why I trade on EUR/JPY on LOWER entry. As you have seen I was so late to enter in the market by looking at the yellow box on the image arrow down, but one of the confirmation I am waiting is that when the static(Color Blue line) of the Bollinger Bands crosses on the EMA 35 I have set up (Color Violet line) so it came up. 

But I put the trade after 5 minutes to give you illustration that the volume is still increasing. See the illustration below, the gap of the static line of the bollinger bands are going more apart from each other which means the bears are still in control of the market. 

As you can see also with the tools I used in RSI 14 color violet line that the line crosses a little above the 50 line of the RSI then it continues to move lower until it happened a bull test trying to reverse the market but that's only a small pullback of a strong downtrend and I am so much apprehended by seeing the small pull back so I use martingale system to cover up my first entry, and the result is still a bear market and I won the trade.

You can also verify at the MACD below that set up a pullback trying to reverse, when the moving average color blue trying to cross the signal line color red. But as you can see in that trend using MACD, the volumeis still increasing on a downtrend market. Still it signifies a continuation of a downtrend because the gap was so clear from the zero line of the MACD and the 2 moving averages. Sooner this will reverse as the volume decreases, be sure to watch all the indicators plotted for confirmation of a reversal before putting a HIGHER trade entry.

In this trade I used Bollinger Bands, EMA 35, RSI 14 and MACD. Try this and practice it many times for you to familiarize the indicators and the strategy that fits your trading style.

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In this trade i used a different approach trading in side way bullish trend of the USD/CHF. As you can see on the illustration below, i put a HIGHER entry trade after a big green candle where a red candle illustrates a rejection on its wick above the body and closes also on the level of the green candle. That illustrates a small pullback testing the bulls to give in, but that is a fake signal that bears are coming over bulls, still signifies the continuation of an uptrend and still gaining strength on the market. As you can observe from the crossing of the blue line or the lower EMA to the higher EMA red line, the candles are respecting the lower EMA, whenever it touches the blue line, it tends to move away from it. Even it touches the blue line or lower EMA it will also moving away from it because that's only a pullback of the bears on the market. It is shown below that the market is a strong uptrend because the gap between the lower EMA and higher EMA is so far from each other. As the market is developing a strong bullish trend, it also crosses the WMA yellow line, it means it breaks the resistance line, now the WMA becomes support. Both of the two EMA's blue line and red line crosses the Highest EMA yellow line, signifying a strong uptrend.

As you can see I used also a martingale system to maximize my profit every pull back of the market while the trend is going up.

Illustrating below the RSI 14 as one of my confirmation tools, that the line did not even cross the 50 line after the lower(blue) EMA crosses the higher(red) EMA. And also the two moving averages of the MACD is over or above the zero line which means that the market is on the bull's territory.

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 As a result, its a win trade. Remember, never make an entry without a clear view of your trade. See confirmation on all tools you are using on your trading platform. Analyze the market before putting a trade, reason out your entry why putting a trade in that position in order to have a smooth trading always.

Be sure to know what is happening in your screen and you must have the knowledge on how to use properly every tool you are using so that you can have a clear view on your trading experience.

A profitable trader is a person who learns always from his/her mistakes and portrays patience, persistence and a well-disciplined human being having an attitude that his/her trades benefit from it.

I hope this can give you light on how binary trading it should be. Please leave your comment below if you have seen any mistakes from my presentation and I will try to look back in it.

WALKING THROUGH IQ OPTION

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Watch the videos video that will guide you in IQ Option Platform

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HOW TO USE NEWS IN TRADING

HOW TO READ ECONOMIC CALENDARS







PLATFORM SETTINGS







HOT TO DEPOSIT FUND TO YOUR LIVE ACCOUNT







HOW TO WITHDRAW FUNDS






ACCOUNT SETTINGS







WHAT ARE FX OPTIONS




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TECHNIQUE ON HOW TO TRADE BINARY OPTION

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In today's report, I will discuss some of my best techniques in binary trading that others won't reveal to you. This is very strategic for me because it will train you to stop the recurring fear in you while trading in your real account. This sometimes called intermediate exercise to train your heart and brain to coincide with each other while trading.

In order to have a concise and strategic way doing binary trading, before you are going to trade with your real account, you must open first your practice account and do the trade before you do it in your live account. Why? Because this will be your primer to get your rhythm in trading and also to understand first the psychology in the market. And thinking that you are just trading in your demo account while you are in your live trading account.

Believe it or not if you go directly to your live account and trade upon seeing a very good entry, maybe you win once or twice but succeeding trades will be a losing one. Because upon losing 3 consecutive trades your ego will be triggered, your pride started to go higher, after all you lose control and that will ruin your succeeding trades or else if you will not stop your balance will be burnt out. And it sucks that reality in trading, your mindset begin to fall from that persistence that I have discussed from my previous post.

Your negative insight will rise and your interest will fade into what you are doing. That's why, I am writing this post to let you know what is the best exercise before going in into your live account. And of course that strategy will become your strength not your weakness. Do it in your every trading session so that your control will be trained according to plan. What is worst there if you will not do this, the plan for your trading will not be employed. Isn't it that, Plan your trade and Trade your plan? However, if you forgot to exercise first then it's going to be a nightmare. 

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If your are sure what you are doing then it's time to go to your live account and deposit from $10 to $250 to trade for a profit. But, I suggest to deposit $250 so that you have a room to grow. Start with $1 per trade or only 5% of your total available balance for you not to go out immediately when your trading doesn't work in your favor. But, if you do exercise first, it will not be going to fire all your balance. Even a little amount if you can do it consistently then there's a chance you can grow your balance.

One thing more, even you are trading break even if you can maintain your account in just one month, I could see a great future ahead of you as a trader.

Do not aspire on a bigger profit on your first months because you must first alleviate your strategies, adopt yourself into a compatibility mode that makes you more profitable. Remember that binary option trading is one of the riskiest trading ever. You can profit a thousand times in an hour but you can also lose the same.

Discipline yourself first before going broad, train yourself to brace that attitude and you will be a successful trader.

I hope this post can help you to improve more your trading experience. Once again, if you do not have an account yet then click the link below to open a demo account

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