MFI Binary Options Indicator

The MFI binary options indicator is short for Money Flow Index and is a valuable tool in the arsenal of many traders. The technical indicator essentially uses price and volume data to produce overbought or oversold signals. This MFI binary options indicator review covers how to set it up and interpret the meaning of its results, a summary of its pros and cons, suitable strategies, and more.

Binary Options Brokers

  1. Pocket Option - Pocket Option offers ultra-short-term binaries from 5 seconds on one of the simplest web platforms for beginners. Payouts rival alternatives at 90%+ while the ‘Double Up’ and ‘Rollover’ features provide further opportunities to profit. Considering the negatives, the suite of 130+ assets trails binary brokers like Quotex, which offer 400+.
  2. IQCent - IQCent offers binary options with above-average payouts up to 98%. The broker supports an online platform with basic analysis tools but a wide range of timeframes, from 1 minute to 1 month, catering to short and long term trading strategies. Considering the negatives, there are no binaries on stocks.
  3. Videforex - Videforex continues to offer binary options with 20% payouts on crypto and up to 98% on less volatile assets, beating many competitors. A wide range of contract lengths are also supported from 5 seconds up to 1 month. New users will appreciate the welcome deposit bonus.
  4. RaceOption - RaceOption offers 100+ binaries with decent payouts up to 95% and ultra-fast expiries from 5 seconds. With a $250 minimum deposit, clients can enjoy free deposits, fast withdrawals and a range of trading bonuses.
  5. CloseOption - CloseOption offers binary options trading on 30+ fiat and digital currencies through an easy-to-use web-based platform. 15 contract timeframes are available from 30 seconds to 1 month, suiting both short-term and long-term traders. New users also get a joining gift.

#1 - Pocket Option

Why We Chose Pocket Option

Pocket Option offers ultra-short-term binaries from 5 seconds on one of the simplest web platforms for beginners. Payouts rival alternatives at 90%+ while the ‘Double Up’ and ‘Rollover’ features provide further opportunities to profit. Considering the negatives, the suite of 130+ assets trails binary brokers like Quotex, which offer 400+.

"Pocket Option excels for its easy-to-use web platform which provides a best-in-class user experience for short-term binary traders. The $50 minimum deposit is also accessible for beginners while opening an account is really easy. Looking at the negatives, Pocket Option still trails alternatives in its market offering and regulatory credentials."

- DayTrading Review Team
  • Min Deposit: $50
  • Payout %: 92%
  • Expiry Times: 5 seconds - 4 hours
  • Bonus: 50% Deposit Bonus
  • Platforms: Web, MT4, MT5
  • Instruments: Forex, Crypto

About Pocket Option

Established in 2017, Pocket Option is a binary options broker offering high/low contracts on forex, stocks, indices, commodities and cryptocurrencies. With over 100,000 active users and a global reach, the platform continues to prove popular with budding traders.

Pros

  • Well-funded traders who deposit $1000+ can qualify for a 2%+ payout boost, more tradable assets and exclusive perks
  • The range of payment methods beats the majority of rivals, providing fast, secure and convenient deposits for traders in most countries
  • Extremely fast and smooth sign-up process that takes less than 2 minutes

Cons

  • Despite offering competitive payouts up to 92%, binary brokers like IQCent offer higher returns up to 98% based on tests
  • Pocket Option offers a slimmed down iteration of the MT4 and MT5 that doesn't provide the full charting package for advanced traders
  • You need to deposit $1000 to access the extended list of 250+ assets, otherwise just 130+ assets are available

#2 - IQCent

Why We Chose IQCent

IQCent offers binary options with above-average payouts up to 98%. The broker supports an online platform with basic analysis tools but a wide range of timeframes, from 1 minute to 1 month, catering to short and long term trading strategies. Considering the negatives, there are no binaries on stocks.

"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "

- DayTrading Review Team
  • Min Deposit: $250
  • Payout %: 98%
  • Expiry Times: 5 seconds - 1 month
  • Bonus: 20% to 200% Deposit Bonus
  • Platforms: Online Platform, TradingView
  • Instruments: CFD, Forex, Crypto

About IQCent

IQCent is an offshore binary options and CFD broker based in the Marshall Islands. The brand continues to offer a range of unique account types with bonuses and perks, including payout boosts, TradeBacks and free rollovers. With 100+ assets, around-the-clock trading and 98% payouts, the firm is popular with aspiring short-term traders.

Pros

  • The proprietary terminal offers TradingView-powered charts which deliver dozens of technical indicators and studies
  • There's an accessible $0.01 minimum stake for new day traders with a small budget
  • IQCent is one of the few binary options brokers that also offers a copy trading service for hands-off traders

Cons

  • The broker is not overseen by a respected regulator, though this is common among binary options firms
  • IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
  • The market analysis is very basic with limited technical summaries and insights from analysts

#3 - Videforex

Why We Chose Videforex

Videforex continues to offer binary options with 20% payouts on crypto and up to 98% on less volatile assets, beating many competitors. A wide range of contract lengths are also supported from 5 seconds up to 1 month. New users will appreciate the welcome deposit bonus.

"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts also remain higher than most alternatives climbing to 98%."

- DayTrading Review Team
  • Min Deposit: $250
  • Payout %: 98%
  • Expiry Times: 5 seconds - 1 month
  • Bonus: 20% to 200% Deposit Bonus
  • Platforms: TradingView
  • Instruments: CFD, Forex, Crypto

About Videforex

Launched in 2017, Videforex offers access to stock, index, crypto, forex and commodities markets via binary options and CFDs. The proprietary platform, mobile app and integrated copy trading are user-friendly and will suit new and casual traders, and the market analysis tools and trading contests provide good ways to improve your trading skills.

Pros

  • Videforex allows you to enter positions with just ¢0.01
  • Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, which is in line with competing brands like IQCent
  • The support times are fast and reliable based on tests - few brokers offer 24/7 multi-lingual video support

Cons

  • No MetaTrader 4 integration
  • US clients aren’t accepted due to legal restrictions
  • The broker isn’t overseen by a trusted regulatory agency

#4 - RaceOption

Why We Chose RaceOption

RaceOption offers 100+ binaries with decent payouts up to 95% and ultra-fast expiries from 5 seconds. With a $250 minimum deposit, clients can enjoy free deposits, fast withdrawals and a range of trading bonuses.

"RaceOption will appeal to traders new to binary options looking for copy trading, contests and 24/7 customer support. Experienced traders will also appreciate the account-based perks and bonuses."

- DayTrading Review Team
  • Min Deposit: $250
  • Payout %: 95%
  • Expiry Times: 5 seconds - 30 days
  • Bonus: 20% - 200% Deposit Bonus
  • Platforms: TradingView
  • Instruments: CFD, Forex, Crypto

About RaceOption

RaceOption is a binary options broker operating from the Marshall Islands. With over 1,500 clients, the broker aims to offer fast funding, low fees and a secure trading environment. Traders can access over 100 binary options and CFDs, plus copy trading and weekly prizes.

Pros

  • First 3 trades are risk-free in the Silver and Gold accounts, with only $1,000 required to be eligible
  • Flexible weekend trading available plus 24/7 multilingual customer support
  • High payouts on popular underlying assets up to 95%

Cons

  • Withdrawal thresholds apply
  • No free demo account
  • $250 minimum deposit is higher than other binary options brokers

#5 - CloseOption

Why We Chose CloseOption

CloseOption offers binary options trading on 30+ fiat and digital currencies through an easy-to-use web-based platform. 15 contract timeframes are available from 30 seconds to 1 month, suiting both short-term and long-term traders. New users also get a joining gift.

"CloseOption is a good pick for traders seeking a user-friendly binary options platform with high payouts and joining bonuses."

- DayTrading Review Team
  • Min Deposit: $5
  • Payout %: 95%
  • Expiry Times: 30 seconds - 1 month
  • Bonus: $10 Welcome Gift
  • Platforms: Own
  • Instruments: Forex, Crypto

About CloseOption

CloseOption is a Georgia-headquartered broker with over a decade in the trading industry. The brand offers high/low binary options trading on forex and crypto markets, with decent payouts, welcome bonuses, 24/7 customer support and intuitive trading software.

Pros

  • Multiple global payment methods are available
  • Free demo account
  • CloseOption offers weekly trading tournaments with cash prizes

Cons

  • Clients need to deposit $50,000+ to qualify for the best payouts
  • CloseOption is not regulated by a well-regarded trading authority
  • Binary options are only available on fiat and digital currencies

MFI Binary Options Indicator Basics

The MFI binary options indicator measures investor sentiment in an asset. The indicator uses price and volume data as variables to produce a value based on how much money is being used to purchase an investment versus how much is being sold.

The MFI is classed as an oscillator and returns values between 0-100 based on buy/sell ratios. Using the value of the MFI binary options indicator, signals are created which indicate whether a specific stock, index, crypto or other asset is overbought or oversold.

When an MFI value reaches above 80, an asset is classed as overbought, potentially signalling a price correction to a lower level in the short term. Conversely, MFI numbers below 20 signify that an asset is oversold, signalling that a price value may increase in the short term.

Using The MFI Indicator In Binary Options Trading

The MFI indicator is handy for binary options trading as it requires limited investor input and can use real-time market data to generate fast signals. In addition, the indicator is easy to interpret, meaning it is well-suited to beginners and simplified binary options trading platforms.

Also, the ability of the MFI binary options indicator to predict momentum swings through divergences allows traders to create evidenced, short-term price predictions. And these short-term movements are often the most lucrative for binary options traders.

Examples Explained

Here are three examples of how traders can use different MFI binary options indicator values to inform their trades…

Trader A is a crypto enthusiast using a binary options broker to speculate on the price of one of his favourite coins, Solana.

Solana is trading at $29.435 and Trader A thinks they spot an opportunity to profit. They use the MFI binary options indicator to conduct technical analysis.

After 10 minutes, the MFI value suddenly plummets to 4.02. This strong oversold signal suggests a potential price correction within the short term. As a result of this notable value, Trader A opens a long position on Solana with an expiry time of two minutes.

What binary options MFI indicator means definition
SOL/USD

Trader B is a keen forex trader and wants to capitalize on the high payouts for correct binary options prediction on this market. They are using an MFI binary options indicator to analyze the EUR/USD market, which sits at 0.98685 at 22:18.

They see that despite the falling value of EUR/USD, the MFI value is steadily increasing. This slight divergence suggests that the downward trend may be curtailed and the price could rebound in the short to medium term. As a result, they place a five-minute binary options contract going long on the asset.

MFI binary options indicator is defined as
EUR/USD

Trader C is looking to make a trade on a popular and liquid US stock, Alphabet. Google’s parent company is trading at $100. Trader A uses the MFI binary options indicator to help predict which direction the stock price will move.

For the last five candle intervals of 1 minute, the MFI value has gradually increased from 55 to 75. This indicates a positive short-term trend where more investors have been purchasing the stock than selling it.

Based on these values, Trader C concludes that there is significant buy pressure on Alphabet and that the stock price may continue to rise. Accordingly, they place a long binary options contract on the stock with an expiry time of 10 minutes.

Availability

Our experts found that a limited number of proprietary binary options platforms support the MFI binary options indicator. Also, many do not support additional indicators, even when using an adapter or downloading an extension. Instead, most favoured the RSI indicator, which does not consider the trading volume and paints a less complete picture.

Fortunately, binary options brokers that used third-party trading platforms, such as MetaTrader 4 (MT4), TradingView or NinjaTrader, offer a more complete range of technical analysis indicators and tools. As a result, the MFI binary options indicator can often be used for free on training accounts with third-party platforms.

The indicator is even so simple that the MT4 mobile trading apps for iPhone and Android could easily run and display it in real-time.

Pros Of The MFI Binary Options Indicator

Cons Of The MFI Binary Options Indicator

Strategies

Investors can utilize several trading strategies with data from the MFI binary options indicator. Traders can use binary options demo accounts to test these strategies for free on specific assets, as some markets, such as cryptos, may be more suited to MFI analysis.

In our earlier examples, Trader C followed an MFI binary options indicator trend signal. Traders can identify the indicator as signalling a trend when the MFI value shows consistent increases or decreases.

This is perhaps the most simple signal to follow, and investors can frequently enact the strategy. However, individual investors have to decide what constitutes a ‘‘consistent’’ trend here, as well as the size of the overall movement that indicates a signal.

These trends are short to medium-term signals, often suited to a one-minute binary options strategy up to 15-minute contracts.

Overbought & Oversold

When the MFI binary options indicator value is close to zero or 100, the indicator signals that a security or asset is oversold or overbought. This is the strategy that Trader A used in our earlier example.

Most MFI indicators have threshold values of over 80 for an overbought asset and below 20 for an oversold one. However, some investors may wish to alter these to 90 and 10, or even 95 and 5. Striking a balance between the number of actionable live signals and their strength is up to each trader, depending on their error/risk tolerance.

When the MFI indicator signals an asset is oversold, traders following this strategy will want to open a long position on an investment. Binary option contract lengths from 30 seconds to two minutes could work well here.

Conversely, when investors see an overbought signal, this strategy would look to open a short position. Again, traders can use 30-second to two-minute binary options contracts.

Divergence

Divergence is less common with the MFI binary options indicator but arguably the most powerful strategy for making accurate predictions. Trader B opened a position on a slight divergence, which they believed indicated an imminent momentum shift and price reversal.

The divergence strategy often involves medium to long-term binary options contracts, as turnarounds in the market may take longer to manifest. Binary options traders can target contract lengths of between five and ten minutes for liquid assets and test the efficacy of extended contracts if trading a more obscure security.

How To Set Up The MFI Binary Options Indicator

  1. Find Your Trading Asset – Before setting up the MFI binary options indicator, navigate to the section of your trading platform that covers your chosen trading asset. This can normally be accessed by typing in your security from the central hub of the platform, usually through a search bar.
  2. Add The Indicator – Now that you are on the page of the asset you wish to analyze, it is time to add the MFI binary options indicator to the chart or graph. Navigate to the indicator menu in your platform and either type in ‘MFI’ or manually select ‘Money Flow Index’ from the list.
  3. Adjust The Indicator – The indicator may ask you to define the overbought and oversold ranges. Investors can either leave these values at the standard 20 and 80 levels or adjust them based on their personal preferences. Additionally, most platforms will place this indicator at the bottom of your screen. This works for many investors, but those who wish to reposition it can click and drag the data set to another location on the trading platform. Furthermore, the MFI binary options indicator will readjust for different intervals as you zoom in and out on an asset’s price history, so try it out for different time frames.
  4. Monitor The Values – Whether you’re looking for divergence, strong trends or overbought and oversold zones, your next step is to monitor the MFI binary options indicator values to identify signals. Some platforms facilitate setting custom alerts when a parameter is reached. A few, using an adapter or extension, will allow you to automate the trading process.

Final Word On The MFI Binary Options Indicator

The MFI binary options indicator can provide useful signals for trading. It provides public insights into trader sentiment and potential upcoming short-term momentum shifts. This indicator is best utilized with other tools to produce a more holistic picture of an asset. Disappointingly, not many binary options platforms support this indicator, but its availability enhances those that do.

FAQs

Is The MFI Binary Options Indicator Free?

For the trading platforms we found supporting the MFI binary options indicator, there was no charge to add it to a graph and use it for analysis.

Can I Get The MFI Binary Options Indicator For MT4?

Yes, the MFI indicator comes as standard in the MT4 trading platform. However, not all binary options brokers and groups offer the MetaTrader 4 platform.

Why Is The MFI Binary Options Indicator Not Working?

No indicator will be effective 100% of the time. If your error tolerance is lower than the signals being put out by this indicator, consider changing your values from the standard 80/20.

Which Indicators Are Best For Binary Options Trading?

The MFI indicator is an excellent choice for binary options traders as it offers insight into short to medium-term trends and momentum changes. This indicator is also effective in combination with other tools, such as the MACD and Bollinger Bands.

Can I Test The MFI Binary Options Indicator?

Most binary options platforms support free demo programs where investors can connect and test new indicators and strategies using paper funds.