Capital Option is one of the well renowned binary options brokers in the World today. It is a brand name of Spotoption Exchange Ltd, Licensed and Authorized by the Cyprus Securities and Exchange Commission (CySEC). It is also licensed and regulated in the EU.Established in 2013, and thus a relative newcomer, Capital Option has nevertheless already being established on the binary options market for offering innovative, intelligent investment opportunities to their customers and the possibility to trade on one of the most advanced trading platforms.
To succeed as a binary options trader, you have to get your conscious and sub conscience mind working for you. You must have a winning attitude, which can be achieved by surrounding yourself with positive events and introducing yourself to self-motivating or positive attitude tapes or books. Some call such ability an inherent feel for the market. Even better, they have the ability to act swiftly and execute a trading plan. I believe that these are talents that you develop and are not born with. Successful binary options traders were, are, and always will be students of the markets. They are achievers who continuously study, in perceptive detail, people’s actions, the processes of events, and the products in the markets they trade. When they place a trade, it is an educated decision, not merely a guess, and they know it. That knowledge gives them the confidence to execute and act on trading decisions. Confidence or thoroughly believing in yourself may come naturally or from the secure feeling you had when growing up.
Other ways to gain confidence in yourself might have come from overcoming an obstacle or having a successful experience in conquering some adversity in life. You consciously know that you have achieved or overcome challenges and can succeed due
to a past experience. Building confidence in yourself and in your binary options trading skills is extremely important in stimulating an optimistic winning attitude. The other common feature that successful traders seem to have is they are not afraid to be wrong. They realize that anticipating a market move will always include an element of risk. They act, not react, to market conditions. This means they place orders before the market moves rather than wait until after the market reacts to a situation or event. In my experience, those who hesitate or wait or are not prepared seem to have the most trouble capturing the element of success when it comes to trading futures.
Stochastics are an oscillator developed by George Lane and are based on the following observation:
As prices increase – closing prices tend to be closer to the upper end of the price range
As prices decrease – closing prices tend to be closer to the lower end of the price range. Fast Stochastics consists of two lines, % K and %D:
The %K line measures, as a percentage, where the current close is, in relation to the lowest low over the observation period. This is shown on a scale of 0 to 100, where 0 is the observation period low, and 100 is the observation period high.
The %D line is a Simple Moving Average of the %K. Because it is a moving average, this line is smoother than the %K and provides the signals for an overbought/oversold market.
Fast Stochastics are more sensitive than Slow Stochastics and therefore more likely to give false signals. As a result Fast Stochastics are less commonly used than Slow Stohastics.
The most common uses of Stochastics in Forex and Binary Options Strategies are to:
An overbought or oversold market is one where the prices have risen or fallen too far and are therefore likely to retrace. If the %D line is above 80% then the close is near the top end of the range of the observation period, while a reading below 201% means that a close is near the bottom of the range of the observation period.
Generally the area above 80 is considered overbought, while the area below 20 is oversold. The specified overbought/oversold ranges vary. Other commonly used ranges include 75-25, 70 -30 and 85 -15. Overbought and oversold signals are most reliable in a non-trending market where prices are making a series of equal highs and lows.
If the market is trending, then signals in the direction of the trend are likely to be more reliable. For example if prices are in an up trend, a safer trade entry may be obtained by waiting for prices to pullback giving an oversold signal and then turn up again.
For a buy or sell signal, the following conditions must be met in order.
Divergence between Stochastics and the price indicates that an up or down move is weakening. Bearish Divergence occurs when prices are making higher highs but the Stochastics are making lower highs. This is a sign that the up move is weakening. Bullish Divergence occurs when prices are making lower lows but the Stochastics are making higher lows. This is a sign that the down move is weakening. It is important to note that although Divergences indicate the weakening trend, they do not in themselves indicate that the trend has reversed. The confirmation or signal that the trend has reversed must come from price action, for example a trend line break.
Parameters Observation Period for %K FAST: (default 5) Observation Period for %D FAST: (default 3)
A value greater than the default results in a smoother less sensitive %K Fast line. The averaging period is the number of observations of %K FAST lines used in the moving average. The smaller the value, the close the %D will be to the %K