5 Candles Reversal Binary Options Trading Strategy

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The strategy is a simple system based on a 3 point chart pattern. When looking at a downward pattern, the 1 would be at the highest and for a up, 1 would be 1 the reversal binary option strategy the lowest based on the swing in the pattern. See the diagrams below for more information. Usually the down trend comes up after a trend that was moving upwards. The up pattern appears after a downward trend. You only enter the market when the resistance or support of point number 2 is broken.

The up pattern is not valid if the point number 3 is at a point lower than 1. The same 1 the reversal binary option strategy the down pattern, point 3 should not be higher than the point 1 for it to be valid. The strategy cannot be applied correctly if point 3 is at a higher level on the up cycle or lower on the down cycle.

To stay safe when using this strategy you need to ensure that you stick to this specific point and not enter the market at this point. This strategy relies on reversal patterns so you need to stick to this one specific rule. This strategy is a little harder for amateurs to grasp, but once the strategy and the highs and lows are understood, the application of the strategy becomes a lot simpler. This particular strategy has been around for many years and is used reliably by traders of Forex, equities and stocks 1 the reversal binary option strategy.

This is a strategy based on price action and the resistance and support principles are clearly laid out. Although this is particularly used as a reversal strategy, it can be used with tends in a normal way as well.

In diagram 2, you can see the lows and highs are numbered, the new trend is downward and there have been a number of successful Put opportunities. Whenever the support at point 2 is broken, the market is entered and all trades are taken going with the trend.

There is protection from bad trades by making sure that point 2 is broken on the lowest point, if not, this would be a losing trade. To use this strategy requires software that can provide accurate charting.

To give an example of how this strategy can be used, we will take a down pattern to work with. The opposite would apply for an up pattern. When there has been a strong move upwards, you can start looking for the pattern to start to form. Start off with the first peak which is the top of the trend if the strategy works out. Should the price continue to increase, you would need to mark the newer high point as point 1.

We should see a counter move start and the lowest point of the move can be marked as number 2. If the new move shows up higher than the original point 1, then this strategy will not work for this specific trend. If the new point is not higher than the previous point 1 and the move appears to be downwards, mark 1 the reversal binary option strategy highest point of the latest move as number 2.

This completes the pattern but remember to stick to 1 the reversal binary option strategy rule. The price must move low enough to break the point that was set as number 2, which was the lowest point previously.

This means that we can enter a trade 1 the reversal binary option strategy choosing Put as we have met the strategy conditions. See images below for more information:. This particular strategy has a high success rate as it can help avoid bad trades as well as giving good indicators of potential good trades. This is not a fail-safe method as the changes in the market can sometimes be unpredictable and you can end up with some false positives, but overall, this specific strategy has a good chance of earning some good profits if applied correctly.

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Moreover, most of the traders evaluate this strategy on their own, without any prior research or consultation. The reason behind the popularity of such a strategy is mere common sense. RSI is an integral indicator of momentum, with the help of which traders evaluate the level of current gains to losses.

This efficient comparison between the recent gains to losses can further assess when an asset is either overbought or oversold. Going by the RSI index, when RSI falls below 30, that particular asset in discussion is thought to be oversold, and vice vers.

That is a reason to believe that a reversal could occure, not a signal however! In order to derive trading signals, it plots them on the same chart and makes use of the 9 day MACD of the respective asset. Now, when the MACD goes beyond its 9 day moving average, it indicates a better time for buying and when it goes further below, it indicates selling time. The market conditions are extremely volatile and there is no hard and fast rule as to suggest in what ways the indicators will derive the accurate results.

A plotted chart can anytime give different result than that of a real market situation. So, you should always keep in mind that there is not a single Holy Grail, atleast not in the trading market.

Anytime, the market can turn a complete U-turn and you can find yourself under tremendous loss. Furthermore, with so much volatility and price adjustments, false assumptions may also be generated. The most integral problem here is that reliable trade opportunities, in which all the indicators reveal the same results are very hard to find and almost impossible.

Your email address will not be published. How to use our strategies from Best-Binary-Options-Strategy. Leave a Reply Cancel reply Your email address will not be published.

Binary Options Fibonacci Strategy. Strategy categories 15 minute strategies 2 minute strategies 30 minute strategies 5 minute strategies 60 second strategies All Binary Options Strategies Hour strategies News Other strategies Technical Analysis Strategy. The best strategies in one place.