Which matters more — trade quality or trade quantity? Quality is often the priority, though this is debatable. In practice, the distinction might look like this:
- Three or four trades per day, each closing in profit.
- A win rate of no more than 60%, but with overall returns comparable to those achieved by taking a high volume of trades.
Regardless of which binary options strategy a trader uses, the question of which indicator best fits their trading style always arises. One versatile solution worth considering is the QQE indicator — short for Qualitative Quantitative Estimation.
This tool can be useful to any trader because it is not tied to a specific trading strategy. It allows the user to analyse the market from both qualitative and quantitative perspectives. The indicator was developed by a binary options trader who enhanced and refined the RSI indicator, producing a QQE oscillator capable of reliably identifying short-term trends.
From a technical standpoint, the QQE indicator consists of two lines — one forming a vertical scale and the other a histogram whose colour changes depending on market conditions. Green and red represent the fast and slow lines respectively.
Like other oscillators, the vertical scale reflects the strength and direction of the emerging trend, while the histogram visualises this process. When price breaks above the +10 level or below the −10 level, the histogram shifts from yellow to green or red, signalling the beginning of an upward or downward trend respectively.
Instructions for installing indicators in MetaTrader 4:
How to Use the QQE Indicator
When trading binary options, the QQE indicator generates two types of signals:
- A call signal is generated when the green line is above the red line. When the red line is above the green line, a put signal is generated.
- The green line crosses the +10 or −10 level, as shown on the histogram. Crossing above +10 produces a call signal; crossing below −10 produces a put signal.
By processing each new candle through mathematically complex calculations, the QQE indicator is able to generate a large number of reliable signals for binary options trading. It works best when used alongside your existing trading strategy. Because the QQE effectively filters out short-term noise, it also provides useful guidance for avoiding counter-trend entries:
- Avoid opening put trades when the histogram is green.
- Avoid opening call trades when the histogram is red.
The QQE identifies the emergence of a new trend. Potential reversals can also be spotted when the two lines cross.
Download the QQE Indicator
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