Candlestick Binary Options Winning Strategies. October Special Offer: Get started with only €50 at HighLow #1 Ranked regulated broker: Get Started Here! One of the most important aspects of binary options method is to use candlestick technical analysis. With the help of this method, you will be able to increase your chances of predicting movements of assets in the binary options business. Using candlestick binary options strategies is useful in predicting the future movement of assets based on the influence of traders’ and speculators actions performed. As you know, the movement of an asset can also be influenced by the trading behavior of financial traders. For example, if a huge number of traders decide to sell an asset, then the value of that asset is expected to drop. If a huge number of people decide to buy an asset, then the value of the asset will increase. Using candlestick technical analysis traders will be able to predict the future movement of an asset based on the overall market sentiment and trader action on a particular asset. Read the article below in order to learn how this works exactly. Note: The method described below only works with brokers that have the required candlestick charts on their platforms. International traders can use 24Option while traders from the USA can use Wynn Finance. Both of these brokers have the required charts to use this method and have a long and solid reputation.
Best Winning Tips for Newcomers. Breakeven Ratio & Profit Margin. Candlestick Winning Strategies. Doji Candlestick Technical Analysis. Engulfing Candlestick Analysis Method. Guide on Money Management. Guide on Trading Stocks Successfully. How Much Should I Invest Per Trade in Binary? How to Make Money with Long-term Strategies. Trading Options on News. What are Candlesticks in Binary Options? Candlesticks are indicators in financial trading including binary options that will reveal the movement of certain assets based on the actions performed by traders during a particular moment in time. Imagine the following example: – The value of an asset is at $100 during a given moment.
– 1,000 people decide to sell the asset bringing the price down to $90. – 10,000 people decide to buy the asset increasing the final price to $92 after a few minutes. – After further 30 minutes, the value of the asset becomes $110 because of the high number of buys. Using normal charts, in the initial few minutes you would have only been able to notice that the value of the asset has decreased dramatically. Seeing this, you would have most likely bet on the outcome that the value of the asset would continue to decrease even further. As such, you would have lost money in the example above since the value actually recovered and reached an even higher value than the initial value. What if there would be a method that would reveal you the ratio of people selling and the ratio of people buying the mentioned asset? – If this would be possible, then you would have been able to see that a huge number of people decided to buy after the price dropped, meaning that the price was expected to increase in the future. This way after the drop from $100 to $90 you would have been able to tell that the price would have INCREASED from here on rather than continued to decrease. You would have been able to purchase the right binary options contract in this case. Well, doing EXACTLY the thing mentioned in the above paragraph is actually possible using candlesticks in binary options. In order to understand how this works, first you will have to know what a candlestick is made of. Below you will find the elements that make up a candlestick.
The real body or body of the candlestick is the rectangle in the middle of the candlestick. The length of this rectangle represents the size of the movement caused by trader action. For example, if the body is short, it means that the value of the asset has only increaseddecreased slightly. A long body denotes a large charge in the value of the asset. The shadows are the lines on top or on the bottom of the real body. The length of the line denoted the number of traders and trades that were necessary in order to determine the movement of an asset. For example, a very long line on top means that a very large number of traders have decided to buy the given asset. A long line on the bottom means that a large number of people have decided to sell the asset. Each real body also has a color, most commonly either red or green. A red color means that the value of the asset was decreasing.
A green real body means that the value of an asset has been increasing. Some binary options brokers do not use the colors red or green in order to represent the direction of candlesticks. The most common alternative is white and black where white represents an increase while black represents a decrease. The length of the real body. As hinted above, the length of a real body denoted the size of the increase or decrease in the value of the asset. A long red real body means that the value of the asset has decreased a lot in a very short time frame. A very long green real body means the opposite of this. The length of the shadow. The length of the shadows denotes the number of traders and number of trades that were executed for a particular position. A very log shadow on top of the real body means that a lot of traders have bought the asset in question. A very long shadow on the bottom of the real body indicates that a of of traders have suddenly decided to sell the asset in question.
Predicting the Movement of Assets with Candlesticks. Now that you know what candlesticks actually are in binary options and how to read them, we will reveal you how you can use them in order to predict the future movement of an asset. There are basically two main strategies that work best. The shooting star method. The first method is called the shooting star method. This method can be used both in binary options and traditional forex or stock trading as well. However, it’s most efficient in binary options trading. The shooting star binary options method uses candlesticks in order to predict the decreasing of the value of the asset in short term. In order to use this method you will have to look after a very short green or red read body as well as a very large lower shadow . Let us explain what this means. Imagine that the value of an asset is continually increasing. Now, you suddenly notice a very small decrease (represented by a small red real body) or a drastically lower increase (represented by a very small green real body).
You also notice that the real body has a very (!) small or even non-existing upper shadow but a very long lower shadow. This means the following: – A very large number of traders (almost every trader trading at that moment) decided to sell the asset in question. This will lead to the following: – The value of the asset is expected to decrease and continue to decrease in the upcoming 30 minutes – 1+ hour. What you should do: – Buy a binary options contract and invest a lot of money (or as much as you want) on the outcome that the value of the asset will decrease in the next 5 minutes to 30 minutes. The hanging man method. The hanging man method is basically the opposite of the shooting start method in binary options trading. This method is used to predict the sudden upward change in the movement of assets. However, this method is less accurate than the shooting star method. If you are a newcomer, then you should initially focus on the shooting star method only. You will be able to use the hanging man binary options method during a session of trading when the value of an asset is continually decreasing. In this case, if you notice a very short red or green real body and a very long upper shadow you can guess that the value of an asset will begin to increase shortly.
Take this example: The value of an asset is continually decreasing. At some point you notice a very short real body and a very short or non-existing lower shadow as well as a very long upper shadow. This means the following: – A very large number of traders have decided to buy the asset in question. This will lead to the following: – The value of the asset will highly likely increase. What you should do: – Invest in a binary options contract that predicts that the value of the underlying asset will increase during the next 5 to 30 minutes. And it’s this is how these binary options candlestick strategies work. Pretty simple, isn’t it? Please keep in mind: All of these only work at a binary options broker that has the appropriate charting tools to display candlesticks. You need to make sure to only sign up at such a broker. Non-USA traders can use 24Option while traders from the USA can use Wynn Finance. General Tips and Considerations.
As you could have noticed above, using this binary options winning method is not that complicated after all. It’s all about spotting patterns and acting accordingly. A very important part of learning to use this method is to remember the designs of the candlesticks mentioned above. You will have to exercise a little bit trading with a demo account before you will be able to spot these trend developments hinted by the candlesticks all the time. However, after a few rounds of practice you’re set to go. Likewise, you can use the information you learned here in order to make all kinds of other predictions as well. Such as, for example, if the real body is very short and both the upper and the lower shadow are of equal length and are very large, then in this case, the value of an asset is expected to remain constant. There are also two considerations you will have to remember. The first is that binary options candlesticks won’t always get it right. In other words, it’s also likely than in the case you see a pattern like the ones mentioned above, the opposite of the expected outcome will happen. However, most of the time these patterns are indeed capable of predicting the correct outcome.
We’d say they are accurate around 75%-90% of the time. This is more than enough to generate a constant positive winning ratio. The second consideration is that you can only use these strategies in order to predict the movement of an asset on a short-term basis. By short term we mean anything between 5 minutes to 1 hour. These strategies will not be accurate for long positions. And this is all for this method guide. However, you are welcome to check out our additional guides and articles in order to learn more binary options winning tips and tricks. Have fun trading. UPDATE: Does all this still seem too complicated for you? – You can also try out this binary options method for beginners first before you delve into advanced strategies. Latest Binary Options Articles & Guides.
In this detailed and complete guide I will talk about how much money you should invest per trade when trading binary options. Too many websites claim that you should invest as much as possible but is this really effective. and safe? Learn to use long-term binary options strategies in order to make money in binary options trading. Find out why these strategies are the easiest to implement. Learn how to trade stocks in binary options. Trading stocks is one of the most difficult ways to make money in binary trading but if done right it can offer massive winning and payout opportunities. Binary Options method. Welcome to our binary options method section. Here you will find a beginners guide to strategies, leading on to more advanced information about things like money management, and articles on specific strategies. Basic method For Successful Trading.
method is one of the most important factors in successful binary options trading. It is the framework from which you base your trade decisions, including your money management rules, and how you go about making money from the market. There is no one Holy Grail unfortunately, if there were then we’d all be using it! The two most very basic categories of method are: Fundamental strategies focus on the underlying health of companies, indices, markets and economies and while important to understand, is not as important to binary options as the technical aspect of trading. Technical trading, or technical analysis, is the measurement of charts and price action, looking for patterns and making educated guesses, speculations, from those measurements and patterns. method simplifies your trading, takes guesswork out of choosing entry and reduces overall risk. The text book definition reads like this a plan of action designed to achieve a goal or overall aim, the art of planning and directing operations in order to achieve victory. When it comes to trading the goal is to 1) make money and 2) not lose money . The number one method of achieving this goal is to use a rules based approach to choosing entries that relies on ages old, tried and true technical analysis indicators. There are dozens, possibly hundreds if not thousands, of ways to trade the market, all strategies. They can be categorized in terms of the tools used, the time frames intended, the amount of risk associated with and many other ways, these being the primary. Price ActionScalping Strategies – Price action strategies rely on the movement of the market to time entry.
These can be trend following or not, long or short term and utilize bullish or bearish positions. Trend FollowingDirectional Strategies – Trend following strategies target assets that are trending strongly to pinpoint a series of profitable entries with a high rate of success. Range BoundShort Term Strategies – 99% of the time the market, or an individual asset, is not trending but trading in a range within a high and low mark. These strategies focus on support and resistance levels, reversals within the range and short term trends as asset prices move up or down from support to resistance and vice versa. Long TermMomentum Strategies – These are the less risky of the strategies as they target stronger signals and longer term time frames. These signals have a higher chance of success but take longer to develop and longer to unfold than other types of signals. A technical analysis indicator is, most often, a mathematical formula which converts price action into an easy to read visual format. Common types of indicators include but are not limited to moving averages, trend lines, support and resistance, oscillators and Japanese Candlesticks. method is 1 of the 2 pillars of risk management, the other is money management. You control risk by targeting only good signals, weeding out obviously bad signals, and never putting so much money on one trade that it will wipe out your account. Money management is the control of your overall trading fund. It should clarify trade size, and long term financial management – leaving you to focus only on trading. A well thought out money management structure should simplify: A trader with a clear financial plan should not need to be concerned with whether they can trade tomorrow, or if their trade size is correct or how they might grow investments in line with their progress. All those decisions are controlled by managing their overall capital with a clear plan.
Japanese Candlesticks. This is the most common method of viewing price charts. The candlesticks give an easy to read view of prices, open high low and close, that jumps off the charts in way that no other charting style can do. They are the basis of most price action strategies and can be used to give signals as well as to confirm other indicators. Support And Resistance. These are areas of price action on the asset chart that are likely to stop prices when they are reached. Support is found when prices stop falling, this happens when buyers step into the market and are said to be “supporting prices”. Resistance is found when prices stop rising, this happens when sellers enter the market (or buyers disappear) and are said to be “resisting higher prices”. These areas, often represented by horizontal lines, are good targets for entries and possible areas where price action may reverse. These lines connect highs and lows formed by asset price as it moves up down and sideways. A series of higher lows and higher highs is considered to be an uptrend and a sign that prices are likely to move higher, a series of lower highs and lower lows is considered to be a downtrend and a sign that prices are likely to move lower. The trend line can be used as a target for support and resistance, as well as a an entry point for trend following strategies. Moving averages take an average of an assets prices over X number of days and then plots those values as a line on the price chart. Moving averages come in many forms and are often used to determine trend, provide targets for support and resistance and to indicate entries.
There are dozens of methods of deriving moving averages, the most common include Simple Moving Averages, Exponential Moving Averages, volume weighted moving averages and many more. They can be used in any time frame, and set to any time frame, for multiple time frame analysis and to give crossover signals. Oscillators may be the single largest division of indicators used for technical analysis. They include tools like MACD, stochastic, RSI and many, many others. These tools, in general, use price action and moving averages in a combination of ways to determine market health. They are displayed as a stand alone tool, usually as a line that ranges between two extremes or above and below a mid point, that can help determine trend, direction, supportresistance, market strength, momentum and entry signals. With any form of trading, psychology can play a big part. A lack of confidence can mean missed trades, or investing too little capital in winnings trades. At the other end of the spectrum, over-confidence can lead to over trading, or increased risk – either of which could wipe an account very quickly. So the trading psychology of the trader is very important. It can also be actively controlled or managed (at the very least, acknowledged). It is another often overlooked area of trading skill, but one well worth spending time to consider.
Read more on trading psychology and learning from experience. A Basic Binary Options method. Here is an example of some basic rules for a binary options method. The trend is your friend, only take trend following entries. In an uptrend only enter when prices are near support, in a downtrend only enter when prices are near resistance. When prices are near supportresistance wait for a confirming candlestick signal. When the candlestick signal appears wait for stochastic andor MACD to confirm, a bullish crossover in an uptrend or a bearish crossover in a downtrend. When rules 1 through 4 are met, enter the trade, only use 3% of account on each trade. When choosing expiry use 2XCandle length. IE, if you are using 1 minute candles then 2 minute expiry, if 1 hour candles then 2 hour expiry.
If the trade fails examine why it did not work, make adjustment if necessary and move on to the next trade. If the trade works move on to the next trade. No method is going to be profitable if you trade with an unreliable broker. These are our top recommended trading platforms for trying out your method. Most Popular method Articles. Strategies for Different Markets. Choosing a Trading method. Developing a trading method for the binary options market requires a key understanding of how the market operates in terms of the trade contracts available, the various expiry times, and the understanding of the behaviour of the individual assets. Unlike the forex market where the asset has to move in one direction or the other by an appreciable number of pips to the trader’s favour before profits are made, the binary options market is peculiar. Apart from the UpDown trade which is based on direction and mimics the requirements of the trades in other markets (except the pip movements), other trade types in the binary option market operate in totally different ways. There are different trade contracts for different platforms.
Some binary options contracts do not even require the trader to get the direction of the asset correct. For instance, trading the OUT contract will need the asset to hit one price boundary or the other for profit to be made. So it takes the trader being able to identify a suitable trade contract to be able to fashion a suitable method. What is used to trade the UpDown contract is not the same as will be used for the InOut contract. The contract type will determine the method. For instance, trading the UpDown contract will require a method that can determine if the asset will make a bullish or bearish movement. Trading the InOut contract will require either a range trading method or a breakout trading method to identify a time when the asset stays in a range or breaks out of that range. If you are looking to develop a trading method for the InOut trade, this is how your mind should be working. In developing a method based on the binary options trade types to be traded, there are tools that can assist the trader. This is where chart patterns, signals services, candlesticks and technical indicators will come in. A simple tool like the pivot point calculator can be used as part of a TOUCH trade method with very effective results. Using tools like these will take us to the next part of choosing a method, which is how to understand and set expiry times. Understanding Expiry Times. Expiry times are very important to binary options, because all trades in this market have time limits.
However, not all binary options trades require time limits to be successful. Trades such as the UpDown trades must reach expiry before the trade outcome is known. In contrast, trades such as the OUT component of the boundary trade or the TOUCH component of the High Yield Touch or TouchNo Touch trade contract must not necessarily reach maturity before the outcome of the trade is known. If a trader bets on a TOUCH outcome and the asset touches the strike price well before expiry, the trade outcome is already known and the trade is terminated as a profitable one. So if the trader is not very good at setting expiry timesdates (and really, no trader in the market can boast of getting his expiry settings right all the time here), the binary options trading method will have to be tailored towards trade contracts which are not totally expiry-dependent. Now when you identify and separate trades that are not so dependent on expiries from those that are, you can better understand what kind of method you would be looking at. Understanding Asset Behaviour. The binary options market combines assets from different asset classes into one market. These assets do not behave alike. Some assets are very volatile with large intraday movements. A very clear example is gold. Some binary options assets are not traded round the clock but only at specific times e. g. the stock indices. The factors that may trigger a massive move in a stock index would obviously not be the same for a commodity or a currency.
Even within the same asset class, no two instruments are exactly the same or behave alike. An understanding of asset behaviour is therefore key to being able to develop a trading method for the market. It is up to the trader to study the behaviour of assets, understand the technical and fundamental indicators that will influence the behaviour and price movement of that asset, and then create a trading method that will work for that asset. In this section, we will demonstrate the application of all the parameters we have mentioned above using a simple but effective trade method. – The method we will use determines price bullishnessbearishness, so we will trade a CallPut contract. – We will trade the method on a one hour chart, so it will be have an expiry of one hour. We do this using our understanding that the effect we want to trade on the hourly chart, will happen in an hour. – We want to use this on an asset that is liquid and responds to the method. So we will use the EURUSD. The method has been used to create a colour-coded indicator, which shows a green arrow on bullish signals and a red arrow for bearish signals. It aims to trade the EURUSD because this currency responds very well to price stimuli during the LondonNew York overlap in the forex time zone, and the response can be delivered in an hour.
As soon as the red arrow appeared (as shown above), the signal was to trade a PUT option on the CallPut digital option. Using this signal, the trade was executed on the binary options platform. The price of the asset (EURUSD) fell in one hour from the time the signal was generated to the expiry, producing a trade result in our favour. This method (a custom method) fulfilled all our conditions: a) It was suited to a trade contract on the binary options market. b) It was a method that was suited to help the trader use a suitable expiry. c) It was suited to the behaviour of the asset and above all, THE method WAS A PROFITABLE ONE. Candlestick Binary Options Winning Strategies. One of the most important aspects of binary options method is to use candlestick technical analysis. With the help of this method, you will be able to increase your chances of predicting movements of assets in the binary options business. Using candlestick binary options strategies is useful in predicting the future movement of assets based on the influence of traders’ and speculators actions performed. As you know, the movement of an asset can also be influenced by the trading behavior of financial traders. For example, if a huge number of traders decide to sell an asset, then the value of that asset is expected to drop. If a huge number of people decide to buy an asset, then the value of the asset will increase. Using candlestick technical analysis traders will be able to predict the future movement of an asset based on the overall market sentiment and trader action on a particular asset.
Read the article below in order to learn how this works exactly. What are Candlesticks in Binary Options? Candlesticks are indicators in financial trading including binary options that will reveal the movement of certain assets based on the actions performed by traders during a particular moment in time. Imagine the following example: – The value of an asset is at $100 during a given moment. – 1,000 people decide to sell the asset bringing the price down to $90. – 10,000 people decide to buy the asset increasing the final price to $92 after a few minutes. – After further 30 minutes, the value of the asset becomes $110 because of the high number of buys. Using normal charts, in the initial few minutes you would have only been able to notice that the value of the asset has decreased dramatically. Seeing this, you would have most likely bet on the outcome that the value of the asset would continue to decrease even further. As such, you would have lost money in the example above since the value actually recovered and reached an even higher value than the initial value. What if there would be a method that would reveal you the ratio of people selling and the ratio of people buying the mentioned asset? – If this would be possible, then you would have been able to see that a huge number of people decided to buy after the price dropped, meaning that the price was expected to increase in the future. This way after the drop from $100 to $90 you would have been able to tell that the price would have INCREASED from here on rather than continued to decrease. You would have been able to purchase the right binary options contract in this case. Well, doing EXACTLY the thing mentioned in the above paragraph is actually possible using candlesticks in binary options.
In order to understand how this works, first you will have to know what a candlestick is made of. Below you will find the elements that make up a candlestick. The real body or body of the candlestick is the rectangle in the middle of the candlestick. The length of this rectangle represents the size of the movement caused by trader action. For example, if the body is short, it means that the value of the asset has only increaseddecreased slightly. A long body denotes a large charge in the value of the asset. The shadows are the lines on top or on the bottom of the real body. The length of the line denoted the number of traders and trades that were necessary in order to determine the movement of an asset. For example, a very long line on top means that a very large number of traders have decided to buy the given asset. A long line on the bottom means that a large number of people have decided to sell the asset. Each real body also has a color, most commonly either red or green. A red color means that the value of the asset was decreasing. A green real body means that the value of an asset has been increasing. Some binary options brokers do not use the colors red or green in order to represent the direction of candlesticks. The most common alternative is white and black where white represents an increase while black represents a decrease.
The length of the real body. As hinted above, the length of a real body denoted the size of the increase or decrease in the value of the asset. A long red real body means that the value of the asset has decreased a lot in a very short time frame. A very long green real body means the opposite of this. The length of the shadow. The length of the shadows denotes the number of traders and number of trades that were executed for a particular position. A very log shadow on top of the real body means that a lot of traders have bought the asset in question. A very long shadow on the bottom of the real body indicates that a of of traders have suddenly decided to sell the asset in question. Predicting the Movement of Assets with Candlesticks. Now that you know what candlesticks actually are in binary options and how to read them, we will reveal you how you can use them in order to predict the future movement of an asset.
There are basically two main strategies that work best. The shooting star method. The first method is called the shooting star method. This method can be used both in binary options and traditional forex or stock trading as well. However, it’s most efficient in binary options trading. The shooting star binary options method uses candlesticks in order to predict the decreasing of the value of the asset in short term. In order to use this method you will have to look after a very short green or red read body as well as a very large lower shadow . Let us explain what this means. Imagine that the value of an asset is continually increasing. Now, you suddenly notice a very small decrease (represented by a small red real body) or a drastically lower increase (represented by a very small green real body).
You also notice that the real body has a very (!) small or even non-existing upper shadow but a very long lower shadow. This means the following: – A very large number of traders (almost every trader trading at that moment) decided to sell the asset in question. This will lead to the following: – The value of the asset is expected to decrease and continue to decrease in the upcoming 30 minutes – 1+ hour. What you should do: – Buy a binary options contract and invest a lot of money (or as much as you want) on the outcome that the value of the asset will decrease in the next 5 minutes to 30 minutes. The hanging man method. The hanging man method is basically the opposite of the shooting start method in binary options trading. This method is used to predict the sudden upward change in the movement of assets. However, this method is less accurate than the shooting star method. If you are a newcomer, then you should initially focus on the shooting star method only. You will be able to use the hanging man binary options method during a session of trading when the value of an asset is continually decreasing. In this case, if you notice a very short red or green real body and a very long upper shadow you can guess that the value of an asset will begin to increase shortly. Take this example: The value of an asset is continually decreasing.
At some point you notice a very short real body and a very short or non-existing lower shadow as well as a very long upper shadow. This means the following: – A very large number of traders have decided to buy the asset in question. This will lead to the following: – The value of the asset will highly likely increase. What you should do: – Invest in a binary options contract that predicts that the value of the underlying asset will increase during the next 5 to 30 minutes. And it’s this is how these binary options candlestick strategies work. Pretty simple, isn’t it? General Tips and Considerations. As you could have noticed above, using this binary options winning method is not that complicated after all. It’s all about spotting patterns and acting accordingly. A very important part of learning to use this method is to remember the designs of the candlesticks mentioned above. You will have to exercise a little bit trading with a demo account before you will be able to spot these trend developments hinted by the candlesticks all the time. However, after a few rounds of practice you’re set to go. Likewise, you can use the information you learned here in order to make all kinds of other predictions as well.
Such as, for example, if the real body is very short and both the upper and the lower shadow are of equal length and are very large, then in this case, the value of an asset is expected to remain constant. There are also two considerations you will have to remember. The first is that binary options candlesticks won’t always get it right. In other words, it’s also likely than in the case you see a pattern like the ones mentioned above, the opposite of the expected outcome will happen. However, most of the time these patterns are indeed capable of predicting the correct outcome. We’d say they are accurate around 75%-90% of the time. This is more than enough to generate a constant positive winning ratio. The second consideration is that you can only use these strategies in order to predict the movement of an asset on a short-term basis. By short term we mean anything between 5 minutes to 1 hour. These strategies will not be accurate for long positions.
And this is all for this method guide. However, you are welcome to check out our additional guides and articles in order to learn more binary options winning tips and tricks. Have fun trading. Best Winning Tips for Newcomers. Breakeven Ratio & Profit Margin. Candlestick Winning Strategies. Doji Candlestick Technical Analysis. Engulfing Candlestick Analysis Method. Guide on Money Management. Guide on Trading Stocks Successfully. How Much Should I Invest Per Trade in Binary Options? Doji Candlestick Binary Options method. October Special Offer: Get started with only €50 at HighLow #1 Ranked regulated broker: Get Started Here! Candlesticks are one of the most useful indicators for technical analysis in binary options trading.
We have devoted a full guide to the most common candlestick method available in binary options which is the pinbar candlestick binary options trading method. However, the pinbar candlestick method is not the only method of this kind available in binary options. Another method that involves candlesticks is the doji candlestick binary options method. Like the pinbar candlestick method, this method also helps traders to predict the future movement of the assets offered. The doji candlestick binary options trading method is used in order to predict a trend change or trend reversal regarding the value of an asset. This method is not that popular as the pinbar candlestick method, however, it’s as much as effective. The more strategies of this kind you know, the more patterns you will be able to discover while trading. And the more patterns you will be able to discover, the larger your winning ratio and profitability rate will be. If you want to lean how the doji candlestick binary options method works then read the article below. Best Winning Tips for Newcomers. Breakeven Ratio & Profit Margin.
Candlestick Winning Strategies. Doji Candlestick Technical Analysis. Engulfing Candlestick Analysis Method. Guide on Money Management. Guide on Trading Stocks Successfully. How Much Should I Invest Per Trade in Binary? How to Make Money with Long-term Strategies. Trading Options on News. What is the Doji Candlestick method? As explained above, the doji candlestick binary options method is a method of predicting the development of a new trend regarding the movement of an asset. By trend we mean the increase or decrease of the value of an asset. Let’s give a concrete example in order for you to understand what a trend is if you are new to options trading: – Imagine that the value of an asset was continually increasing for more than 10 hour now. The above scenario is an example for an up-trend, as in the value of the asset was continually increasing. Now, if you notice a doji candlestick pattern forming then you will be able to know with large accuracy that the trend is expected to reverse at any moment.
By trend reversal we mean that the value of the asset would stop to increase and would begin to decrease shortly. So, in this case all you need to do is to purchase a binary options contract that predicts that the value of the underlying asset will be lower after a certain amount of time expires than the current value of the asset. However, in order to do this, you will have to be able to spot a doji candlestick pattern first. Below you’ll find the description of the doji candlestick pattern. What are doji candlesticks? A doji candlestick is a candlestick formation where the real body of the candlestick is very small or even represented by just a line, while the two shadows are very long (or of medium length) and of equal size. If you see a candlestick formation of this kind, then usually the following will happen: – The value of an asset will stabilize and remain relatively on the same level as on which the doji pattern was formed. – The movement of the value of the asset will reverse and move into the opposite direction than the direction it was moving in before the formation of the doji pattern. So, basically two things can happen. Now you might be asking how to tell which one of the just mentioned two scenarios would happen. – This depends on the length of the two shadows. If the two shadows are only of medium length, then the value of the asset is expected to remain on the same level as during the moment of the formation of the doji. This is because the medium length shadows indicate that not many traders are interested in the asset at hand, so their influence of the movement of the asset’s value is not very strong.
On the other hand, if the two shadows are very long, it means that a very large number of traders have suddenly decided to get involved. In these cases it’s usually those traders that will finally “win” and influence the movement of the asset that will move the asset into the opposite direction. – This is why the value movement of the asset will reverse. So, after spotting these developments you will be able to purchase the appropriate contracts and make the most accurate predictions. If you are confused of the above and don’t fully understand yet what a candlestick is and how it’s components function (real body, shadows, etc.) then please read the segments below. A candlestick is a financial trading indicator that displays the number of traders and amount of trades who either buy or sell a given asset during a given time frame. It also displays the movement of the asset into a particular direction. The real body of a candlestick is the rectangular area that’s either red or green. If the real body is green, then it denotes the increase in the value of the asset. If it’s red, then it denotes the decrease in the value of the asset. If the body is very long, it means that the value of an asset has decreased or increased substantially during a given time frame. If it’s short, it means that the value of the asset barely changed during the given time. The shadows are the “sticks” above and below the real body.
The upper stick denotes the traders and the trades that have bought the asset. The lower stick denotes the traders and trades that have sold the asset. A large stick means that a large number of traders have either bought or sold an asset. The short stick means that a low number of traders have sold or bought the asset at hand. If both sticks are of the same size it means that the same amount of traders are buying the asset as the ones selling them. Making Predictions with Doji Candlesticks. So, now you know how a candlestick looks like and how you can detect a doji candlestick pattern in binary options trading. We have already hinted above regarding what kind of predictions you will be able to make when you discover a pattern of this kind. First, you will have to understand that a doji candlestick can only be used if it’s positioned on the top or the bottom of a trend. What we mean is that this method is only working and you would only use a doji candlestick if the candlestick pattern is preceded by either a consistent increase or consistent decrease in the value of an asset.
If, before the formation of a doji the value of the asset was fluctuating a lot anyway, then you cannot accurately use this method. So, imagine the following scenario: – The value of an underlying-asset was continually increasing for 5 hours. You notice a doji candlestick that has medium sized shadows. In this case you know that the value of the asset will most likely stop to increase in the future as well as that it might not necessarily start to decrease but to stagnate at the value on which the doji is positioned. In this situation you can purchase a binary options contract that predicts that the value of the asset will increase in the future. Naturally, you will be betting against this prediction because you know that the value of the asset will in fact not increase. Now, imagine this scenario as well: – The value of an asset is increasing for 5 hours. You notice a doji with very long shadows. This means that the value of the asset will stop increasing soon and will most likely start to decrease instead. You have two recommended choices in this case: Buy a binary options contract that says that the value of the asset will increase. You will obviously bet against this prediction.
You can also buy a contract that predicts that the value of the asset will decrease and bet for this prediction. And it’s this easy to use the doji candlestick binary options method. Before you use this method in binary options you will have to understand that it won’t work 100% of the time. It however is expected to work most of the time. And this is all for this article. If you want to learn more about candlesticks in binary options and about other binary options winning strategies then check out our additional method articles and pages. Latest Binary Options Articles & Guides. In this detailed and complete guide I will talk about how much money you should invest per trade when trading binary options. Too many websites claim that you should invest as much as possible but is this really effective. and safe? Learn to use long-term binary options strategies in order to make money in binary options trading. Find out why these strategies are the easiest to implement. Learn how to trade stocks in binary options. Trading stocks is one of the most difficult ways to make money in binary trading but if done right it can offer massive winning and payout opportunities.
How to trading binary options for not beginners using candlesticks How often have you thought about your career? Do you want it to bring you lots of money or don’t take a lot of time? There are a lot of variant for earning money but it depends only from you which one will you choose from them to provide success and long-lasting income. In this article we will speak about binary options trading. Nowadays most of adults know about this fast and efficient way of making money. A lot of people think that it is very simple way but you shouldn’t forget that in binary trading options as in any other business if you want to achieve really significant goals in this field you should spend a lot of time and efforts for this. This article is dedicated to such option in binary options trading as using candlesticks. If you are a newcomer in this trade it is rather hard for you to decide whether you need this function or not. We hope that this article will help you to deal with this question. Candlesticks as well as line charts or bar charts were created to display movement of the price. Specialists affirm that candlesticks method is the best method among other which has a lot of advantages.
Let’s consider some of them. Why use candlesticks for successful binary options trading. Reasons for using candlesticks for the successful binary options trading are following: Comparably with bar charts or line charts which display only line which characterize the price movement each of candlesticks works like an indicator. A lot of experienced traders can’t make the right predictions without using candlesticks in their trades. Each of simple candlestick patterns is very simple and allow you to make the right decision intuitively only by observing candlesticks. They are able to characterize rise of the price or its decline. Candlestick patterns will greatly help newcomers to understand promptly how to work out right predictions and to analyze the market situation. This option will come in hand not only for beginners but also for the experienced traders too. These traders often use candlestick patterns for instantaneous analyze of the asset level. It helps them to work out their predictions very quickly and in the right way. Complex candlestick patterns consist of two or more candlesticks unlike previously mentioned patterns. This difference allows traders to make their decisions more unhesitatingly because they are based on several candlesticks which better characterizes the price movement. Very important advantage of candlesticks is that they can show changes that are completely or almost completely invisible when you use bar charts or line charts.
Such important signs as breakaway gaps and island reversals may be missed if you don’t use candlesticks in your trade. One more advantage of using candlesticks is that they are able to indicate directions of the price level much earlier than other indicators will show these changes to you. As example: trading range which is changing is the first sign that shows the changes in the current market and no other indicators besides candlesticks can give you an opportunity to evaluate these changes correctly. Each of advantages mentioned above is really significant in the world of binary options trading and the excellent work of candlesticks is proven over the years by an experienced traders. How to evaluate a candlestick correctly? For successful trading you have to use candlesticks in the correct way. To make them really useful for your trade you must clearly understand what they show and how to work with their signals. Every candlestick consists of body and wick. Let’s see what each of these parts indicates: Variant 1. There is no body in the candlestick. Such candlestick is known as doji and it indicates changes in the market sentiment. Also the doji indicates end of the price movement. Variant 2. The wick is not as substantial as the body of candlestick. This situation divides on two different cases and in each of them wick’s role is important: Candlestick’s wick is completely missing. Such situation shows strong market sentiment in the direction of candlestick.
Candlestick’s wick is rather long. If the wick is long comparable with the body of candlestick it means that the current market is trying to push in a definite direction but it didn’t have energy for keeping this movement. It can although be the result of certain support or resistance that market can’t break. To understand it in the right way you should check the nearest trend lines together with moving average lines and other resistancesupport levels. If you notice them you need to stoop investing in this movement immediately. In the case if you will not notice them you should change your time frame to a shorter and keep your trading. How to Use Candlesticks in Binary Options Trading. When you open your binary options trading platform and pick an asset to trade, you should see a price chart appear. Depending on your broker’s defaults, that price chart will be displayed in one of the following three ways: Most brokers also make it possible for you to switch to the format you prefer. In any case, candlesticks are favored by many traders because they provide a clear, detailed, informative visualization of price. In this article, I will tell you exactly how to interpret candlesticks. I explain their pros and cons, and help you set them up on your binary options charts. The Basic Candlestick Chart. What Are Candlesticks?
Let’s get started with this candlestick tutorial by explaining the basic concept of candlesticks. If you are an absolute beginner, you may still not be sure what I am talking about. Open a binary options chart on your trading platform. Most have candlesticks selected by default. They are the long and short rectangles of varying lengths with little lines which extend from the tops and bottoms. The lines are like “wicks.” If you instead see thin vertical lines (not rectangles) with little horizontal lines sticking out of them, then you are looking at bars, which are a similar concept. If you see a single curvy line across your chart, neither candlesticks nor bars are selected, so you will need to select candlesticks to see them displayed. Note that candlesticks are sometimes called “Japanese candlesticks.” This term refers to the exact same thing. Each candle on your chart represents a specific unit of time. How much time depends on the interval you have selected for your chart. On a one hour chart, each candlestick is an hour.
On a four hour chart, each candlestick is four hours. On a five minute chart, each candlestick is five minutes, and so on. Anatomy of a Candlestick. Okay, now you can at least identify candlesticks on your chart. But you still probably have no idea what they mean or how to read them. Why are some of them longer or shorter than others? Why do some have wicks while others do not? You are the basics of candlestick anatomy: The body is the rectangular part of the candlestick. The long lines or “wicks” which extend from the candlesticks are known as shadows . If a candlestick is white or green (or any other color selected on the platform to indicate a bullish candle), that means that the market trended upward during that candle. The candle closed above the value at which it opened. If a candlestick is black or red (or any color selected to indicate a bearish candle), then the market was trending downward during its formation.
The candle closed below the value at which it opened. The top and bottom of the body tell you the prices at which the candle opened and closed (for a bullish candle, the top is the close, whereas for a bearish candle, the bottom is the close). The shadows tell you the high and low that price reached during the candle’s formation. Here are some tips for interpreting binary options candlesticks: If you see a long candlestick, that indicates that the buying or selling pressure was strong. Price successfully has moved a considerable distance. If you see a short candlestick, that means that neither buyers nor sellers managed to push price far in either direction. A long shadow pointing up indicates that buyers pushed price significantly higher before it ended up closing lower again. A long shadow pointing down indicates that price dipped significantly before closing higher again. Incidentally, if you see a candle with a long shadow pointing above or below and a close near the open, that is called a “pinbar,” and is a reversal pattern (more on that later). Benefits of Candlesticks.
Why use candlesticks on your charts instead of bars or a line? Here are some of their advantages: They provide you with a significant amount of information. A line does not communicate the open, high, low and close the way a set of candlesticks does. Candlesticks also show you intervals clearly. Candlesticks stand out. They are vivid and clear, and many traders find them easy to read at a glance. For some traders, bars just do not provide that level of simple visual impact. Candlesticks are tried and true. Seriously, they have been around for centuries. The guy who invented them was named Homma Munehisa.
He was a rice merchant who lived from 1724-1803. There was a futures market for rice which showed up around that time, and Homma wrote a number of books on investing. His candlestick charts were so helpful that they have been used ever since. Drawbacks of Candlesticks. There really are not a whole lot of reasons not to use candlesticks on your charts. There are only a couple reasons I can think of. One is that they might look a bit “cluttered” to you. Plus, personally, I find OHLC bars easier to read, because the horizontal lines stick out in such a fashion as to tell you instantly where the open and close are at. The line that sticks out to the left is the open, and the line that sticks out to the right is the close. Candlesticks show this through the color, but I always have to think about it. Experiment with bars vs. candlesticks and figure out what you prefer. What is great is that once you learn to use one, you know how to use the other. They really are just two different visual representations of the exact same information. How You Can Set Up Candlesticks On Your Charts. Now that you know how to read candlesticks, you will need to know how you can place them on your binary options charts. The exact steps you need to take depends on the layout of the platform you are using.
That being said, a lot of binary options brokers are powered by a program called SpotOption. While elements may sometimes be rearranged, in general, this is all you have to do: Look for the chart on the trade page where you can see the movement of price for the asset you want to analyze. The chart may already be displayed as candlesticks, but if it is displayed as a line, you will have to change it manually. To do this, look for a set of pictograms which show different ways you can display price. There should be at least two of these. One should show a little zigzag line, while the other should show little candlesticks. You will likely find these pictograms on or near the chart itself. If you are currently looking at a line chart, the zigzag pictogram will be selected. If you want to switch it to candlesticks, then simply click on the other one which shows the candlesticks. Your chart should now reload as candlesticks. Expert Tip: Make Your Candlesticks Red and Green. As one last step, some platforms may give you options when it comes to candlestick colors.
Others may just load them as red and green automatically. If you are given options, I highly suggest that you make them red and green yourself. Set bearish candlesticks to display as red and bullish candlesticks to display as green. Why do this? You just want to make interpreting the candlesticks as easy on yourself as possible, and red and green are colors which most of us can easily associate with the meanings they are set to convey. When you see a green candlestick, you automatically think, “bullish,” and when you see a red candlestick, you automatically think “bearish.” Why not go with black and white? Well, if they are displayed on a white background, they look more like “filled” and “hollow,” and that does not really send a clear meaning. Why would one associate a hollow candlestick with upward movement? Personally, I find this confusing, and plenty of other traders do too, which is why green and red are now defaults on many platforms. Using Candlesticks for Price Action Trading. Now you are ready to learn a little bit about trading with candlesticks.
Candlesticks are great to display on your charts regardless of the type of analysis you are using—whether it be fundamental or technical analysis. But where they really are essential is with price action. Price action is where you look for patterns in the formations of the candlesticks on your charts (note that you can use bars as well if you prefer). Certain patterns tend to correlate with certain movements in price. For example: Pinbars. I have sometimes also seen these referred to by other names, such as “hammers” and “shooting stars.” This is a fairly flat candle with the close and open right near each other. The body of the candle should be located in the top or bottom third to fourth of the candlestick, with a long protruding “nose” going the other direction (the high or low). Formed at an extreme, it is a signal to buy or sell. Inside bars. If you have a smaller bar contained entirely within the previous bar, it is called an “inside bar.” Even one good inside bar may point toward a breakout on the way.
Multiple inside bars are even stronger. If you can get four or more to line up, you are often in great shape. Triangular patterns of consolidation. This is where you have a set of larger bars followed by progressively smaller ones which are inside of the preceding bars. It is a breakout pattern. Basically, it is just a nice set of inside bars. If you get good at identifying these patterns, they can tell you when it is time to place a profitable trade. To learn about how to do this in-depth, see my article on Candlestick Patterns. Conclusion: Candlesticks Make it Easy to Read Your Charts and Plan Your Trades. If you are not currently setting up your binary options charts to display candlesticks, you are missing out on a chance to make your trading a lot easier. Candlesticks are far more informative than line charts, and provide you with a wealth of information at a glance.
They also facilitate price action trading, which is something that you cannot do with a single line representing price. So log onto your binary options platform and click on the icon which shows the candlesticks to display them on your chart. If you have downloaded MetaTrader 4 or another charting platform to help you plan your trades, set up candlesticks there too. No matter what trading method you are currently using or plan to use, you should find that they help you make smarter, more profitable trades. NOTICE. BinaryTrading. org has financial relationships with some of the products and services mentioned on this website, and may be compensated if consumers choose to click on our content and purchase or sign up for the service. – U. S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risks. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose.
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