The main question of the novice investor is how to find the free trading signals for binary options that will show the emerging trend or the trend reversal? Options trading signals can be false and weak, especially when the market is unstable.
"Medium Direction Strategy" and the ADX indicator are designed to define the moment for opening the transaction. The strategy was developed by the American trader J. Wells Wilder.
Apply two indicators to calculate the strategy:
The direction of the price trend (DMI, Directional Movement Index).
Average Price Direction ADX (Average Directional Movement Index).
The most suitable period is 14 bars (candles). It will work well for all assets and timespans from H1. Remember to prove your trading ideas by the several indicators and use the economic calendar to identify the most beneficial signals. You may use Exponential Moving Average to smooth the results. But place EMA on the top of the signals.
On the binary options charts ADX is presented in three graphics in a separate window:
The + DI line demonstrates the increment of the price.
Decreasing in –DI.
ADX is computed as the ratio of the difference or the total sum of + DI / -DI values over several periods. In such a way you can identify the presence of the trend.
Want to see this strategy? Watch the video.