Buy indicator for an option
Updated August 05, Julie Bang The Balance To find the best technical indicators for your particular day-trading approachtest out a bunch of them singularly and then in combination. You may end up sticking with, say, four that are evergreen or you may switch off depending on the asset you're trading or the market conditions of the day. Regardless of whether you're day-trading stocksforex, or futures, it's often best to keep it simple when it comes to technical indicators. You may find you prefer looking at only a pair of indicators to suggest entry points and exit points. At most, use only one from each category of indicator to avoid unnecessary—and distracting—repetition.
This provides the opportunity to follow a stock's movement and attempt to buy it within the natural movement of its trend. Below are the steps to placing this kind of order. To place a Buy order using an Indicator, click the Buy button at the bottom of the price pane.
From the list, select the Indicator to use for the order. This initiates an Indicator order and the AutoTrack feature needed to automatically modify the Indicator order.
This places a Buy Limit order ticket on the chart with the initial order being placed at the price level represented by the Indicator in this example, bar simple moving average under the last bar on the chart.
To create space between the actual order price and the indicator, dial the indicator spinner Ind in the order ticket to the desired distance. This distance will be maintained as buy indicator for an option order is modified with the indicator. Optional 4.
Since an Indicator has the potential to move up or down an unlimited amount, use the Max maximum control in the price scale to create an absolute maximum to which the order can be modified. Optional 5.
But before I get to volatility I want to discuss the indicator I use for my high-probability options strategies.
The trajectory of the Indicator into the future will serve as the path by which the order will be automatically modified. Click Place Order to confirm and submit the indicator buy order.
A live buy order now exists on the chart This order will automatically modify along the trajectory of the indicator at the selected interval. If the stock price moves down and hits the modified Buy level the order may be filled.
This article focuses on a few important technical indicators popular among options traders. Also, please note that this article assumes familiarity with options terminology and calculations involved in technical indicators. The direction of the move which way? Duration of the move how long? Since options are subject to time decay, the holding period takes significance.