Binary Trading Technical Analysis Flashcards
6 cards from real Binary Trading practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Binary Trading Technical Analysis flashcards as text
What does the MACD (Moving Average Convergence Divergence) indicator show?
Answer: The relationship between two moving averages to identify momentum shifts and trend direction
MACD measures the difference between two exponential moving averages and a signal line to identify changes in momentum and potential trend reversals.
What does a 'moving average crossover' signal in binary trading technical analysis?
Answer: That two moving averages have the same value, which may signal a change in trend direction
A moving average crossover occurs when a shorter-period MA crosses above or below a longer-period MA, signaling a potential shift in trend direction and a trade opportunity.
What do 'Bollinger Bands' indicate in binary options analysis?
Answer: Volatility levels and potential price extremes based on standard deviations from a moving average
Bollinger Bands expand during high volatility and contract during low volatility, and price touching the outer bands can signal overbought or oversold conditions.
What does 'volume' data indicate in binary trading technical analysis?
Answer: The number of contracts or trades executed in a period, confirming the strength of price moves
High trading volume during a price move confirms the strength of that move, while low volume suggests a weak or unreliable price signal.
What is 'price action' trading in the context of binary options?
Answer: Analyzing raw price movements and candlestick patterns without relying heavily on lagging indicators
Price action trading focuses on reading candlestick patterns, support/resistance, and price structure directly rather than depending on indicator-based signals.
What does 'divergence' between price and an indicator (like RSI) signal in binary trading?
Answer: A potential trend weakening or reversal when price makes new highs/lows but the indicator does not confirm them
Divergence occurs when price moves in one direction but the indicator fails to confirm it, suggesting the current trend may be losing momentum and a reversal could follow.