The MA RIBBON binary options indicator is a classic technical analysis tool. However, despite its simple components, its appearance and ability to accurately identify trends will appeal to trend-following traders. Learn how to best configure it and add a secret ingredient that will significantly increase the percentage of binary options trades that close in profit in our dedicated review.
Content:
- Characteristics
- Installation
- Overview and settings
- MA RIBBON Trading Rules
- Buying a Call Option
- Buying a Put Option
- Conclusion
- Download MA RIBBON
Characteristics of the MA RIBBON Binary Options Indicator
- Terminal: MetaTrader 4
- Timeframe: M5
- Expiration: 3 candles
- Option Types: Call/Put
- Indicators: MA RIBBON.ex4
- Trading instruments: currency pairs , commodities, cryptocurrencies , stocks
- Trading Hours: Active Market Hours
- Recommended brokers: Quotex , Pocket Option , Alpari , Binarium
Installing the MA RIBBON Indicator for Binary Options
The MA RIBBON indicator is installed in the MetaTrader 4 platform using the standard installation method. To do this, add it to the terminal's root folder by selecting "File" in MT4, then "Open Data Folder." In the folder that opens, navigate to the "MQL4" folder, then "Indicators," and then move all files there. Templates are installed in the same way, but placed in the "templates" folder. Detailed installation instructions can be found in our video:
MA RIBBON Binary Options Indicator Review and Settings
The MA RIBBON binary options indicator is a clever combination of two moving averages displayed as "clouds." If the shorter moving average is above the longer one, the cloud turns green; if the opposite is true, it turns red.
The MA RIBBON indicator can be used for trading stocks, forex pairs , and cryptocurrencies . It is recommended to use this tool on timeframes of M5 and higher, as it produces a significant number of false signals on shorter timeframes.
This indicator has few settings, the main ones are highlighted in the screenshot above. The MA1Period parameter controls the calculation period for the fast moving average, while the MA2Period parameter controls the calculation period for the slow moving average. You can also configure the calculation method for the averages and the price type used to calculate them.
Rules for Trading Using the MA RIBBON Indicator for Binary Options
The MA RIBBON binary options indicator generates trend initiation trading signals based on the intersection of the two moving averages it comprises. However, for profitable binary options trading, the appearance of a green or red "cloud" is not enough. Therefore, to open Call and Put options, it is necessary to wait for certain conditions to be met, sometimes supplemented by candlestick patterns , which we discuss in detail in this collection of articles:
- Candlestick analysis and binary options.
- Japanese Candlesticks for Beginners and How to Read Them.
- Japanese candlesticks – graphical analysis.
- Using pin bars in binary options trading.
We'll open Call options when the short-term moving average is above the long-term moving average, confirmed by the formation of a green "cloud." We'll open Put options in the opposite situation—when the short-term moving average is below the long-term moving average, forming a red "cloud." This will determine the trading direction, and the trade entry moment will be determined by the candlestick pattern: the previous candle closes within the cloud, and the current (most recent) candle closes outside it, in the trading direction.
To increase the percentage of profitable trades, we'll add a filter in the form of the ATR oscillator and a moving average calculated based on it. By default, we'll set the ATR period to five, and the moving average period averaging it to three.
The purpose of this filter is to identify areas of increasing volatility , when the price begins to move actively in one direction or another, and to avoid, if possible, flat periods. As a rule, if the ATR oscillator line is above its moving average, the market is trending; if the ATR line falls below its average, the market is flat, and trading in this asset is not recommended.
Buying a Call Option
- Green MA RIBBON cloud indicates a bullish trend in the market
- The “Call pattern” has appeared
- ATR is above its moving average
- At the opening of a new candle, we buy a Call option
Buying a Put Option
- Red MA RIBBON cloud indicates a bearish trend in the market
- The “Put pattern” has appeared
- ATR is above its moving average
- At the opening of a new candle, we buy a Put option
We recommend choosing an expiration time of 3 candles. We recommend choosing the holding period based on historical data testing results.
Specifics of Using the MA RIBBON Indicator for Binary Options
In addition to the above-described patterns, you can use modifications of them or both options simultaneously to open positions, depending on the statistics of profitable trades for a particular asset.
In modified Call and Put patterns, you need to wait for a candlestick combination in which the previous candlestick closed on one side of the "cloud," and the current (most recent) candlestick closed on the other. Such combinations are quite common during a breakout from a flat , when the moving averages forming the "cloud" converge due to a small difference in their average values. Before using these additional patterns, we recommend testing them on historical data.
Advantages of the MA RIBBON Indicator
The main advantage of the MA RIBBON indicator is its trend visualization. Thanks to the vibrantly colored "clouds," even a novice trader can determine the best direction to open trades. Available settings allow you to select optimal calculation parameters for the short and long moving averages, making it possible to tailor this binary options indicator's signals to a specific currency pair or cryptocurrency.
Disadvantages of the MA RIBBON Indicator
The disadvantages of this indicator include a large number of false signals during flat market periods. To reduce the number of losing trades, we recommend using the MA RIBBON indicator in conjunction with other confirming indicators that act as a filter.
Conclusion
The MA RIBBON binary options indicator is a great alternative to simple moving averages. Its vibrant colors make it impossible to confuse the preferred direction for opening trades. This tool will certainly be appreciated by trend-following traders, as it is based on classic moving averages, which have become the standard for trend analysis.
Since the MA RIBBON binary options indicator is completely free, traders can apply it to any trading strategy and tailor its signals to their needs. We recommend using this tool in conjunction with other indicators, along with a prudent approach to capital and risk management. Be sure to practice on a demo account with a reputable broker before using MA RIBBON in real trading. We wish everyone a favorable trend!
Download the MA RIBBON Binary Options Indicator
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