You probably remember the famous pinocchio character. It is a wooden doll and when it is lying the nose of the doll starts to grow. Something similiar happens in this strategy as you will see but insted of the nose, the candle bar is trying to lie us here. But when can manage to turn this into profits of course. Pinocchio bar, shortly known as pin bar has a small body with very long line(or nose in this case). You can see example of pin bar in the picture.
As you know now Pinocchios nose grew if he told the lie. Same things applies here with pin bar. When the line goes up, it has higher probability that the price will go opposite and that this initial direction was actually a lie and missleading information. That is why the similiar name to strategy. So to give you example, if the line on the pin bar is going up you will short this and if the line is going down you will trade a call for long. Entry point is not really specified since it depends from trader to trader but most of them enter the trade immediately after this pin bar closes.
WHERE IT CAN GO WRONG?
Problem can be at the start when you need to get ahold of the strategy to get expirience and also of course if you not enter the trade when it is needed since timing is important here. It maybe is not really newbie friendly even if it looks like that at first sight but it is simple when you get a grip.
WHY IT IS GOOD?
Assuming you are trading in trend market and that you take trade only when in line with the trend. Then this is definitely one of most reliable strategies since it can offer you high accuracy because the pin bar is giving you a good indication how are participants on the market behaving. You just have to be disciplined to wait for the par to close and become pinocchio so you get clear indication. Always be aware of your surroundings when trading on the market so you do not follow strategy blindly.
If you are researching trading and technical analysis you must have heard of the term that trend is your friend when it comes to trading because following it can make you good profits. But no one really shows how and what you can trend for and with and that is exactly what you will get here, everything layed out with plenty of pictures.
WHAT IS AN UPTREND?
You can determine it by higher highs and higher lows.
When you see a new high or top, whatever it is that is higher then it previously was and even when you have a new bottom that gets higher. You can see that price is going upwards and this is uptrend. We have marked it on the picture so you can easily see it for yourself.
WHAT IS A DOWNTREND?
It is the opposite of uptrend. You can determine by lower highs and lower lows.
When you start seeing that lower lows are forming or maybe some lower highs this means it is going down which represents downtrend. Again, you can see it marked on the picture so you can see how it looks on the chart.
We have covered and determine the trend. If you want to trade it, you must know where it goes and therefore you must draw the trend lines which is useful for technical analysis. To draw it all you have to do is connect on one side and on another side the line, for uptrend you connect two higher lows and for downtrend you connect two lower highs.
As you can see we have made the line and it is time for trading it. When the next time price touches the line you can trade it depending on the trend direction. For example, if price touches the line in downtrend it means it will most likely go down again that is why we can trade a put on this one.
TREND LINE WITH JAPANESE CANDLES
You can see another example here of what it can be done with this trend lining strategy. Price has touched the line and this is appropriate time for making a trade that this will go down most likely. As you can see this is exactly what happened. The pin bar that goes up and then down like this is called Pinocchio since it wants to deceive us, that is where the name came from since if pinocchio lied his nose grew.
TREND LINE WITH FIBONACCI
Here they are used all the same settings but we have also added fibonacci levels just to make it even more sure. As you can see it was again correct.
PROBLEMS WITH TREND STRATEGY?
As it is good it can also happen that the price goes through the line like there is nothing and you have to be prepared for such move but that is just how the world moves. Nothing is perfect and that is why you have to had good money management in place so you are able to get away from this and stay in the game.
To conclude everything. You will higher chance to profit when you take a trade that goes in the trend direction. The picture examples you have seen are there so you can how possible it is to trade for profit. You just need to be disciplined and not give up if trade goes against you. Go with the flow or trend in this case.
This is one of best strategies for new traders. You can actually use it in different ways to determine trend and also reversals and of course signals for trading. Best time frames to use it are short but you can apply it to any time frame. The strategy itself deserves that their author is also written, in this case this is James Ayetemimowa. As we said, it is simple strategy that uses MACD. Good thing is that it follows the trend and uses more then one indicator to determine entry point which is great for binary options trading.
INDICATORS TO USE ONA CHART:
– 50 SMA (GREEN)
– 100 SMA (RED)
– MACD (DEFAULT SETTINGS – 12, 26, 9)
– 5 MIN or anything else you like
HOW IT WORKS:
As you can see the setup itself is simple and it is based on a 5 minute time frame so the signals come regulary. With the two moving averages you determine the trend, type of trade. These two SMAs determine your position, when the 50 bar SMA is above the 100 bar SMA means that the trend is bullish so it goes up. When the short 50 bar SMA is below the 100 bar SMA means that trend bearish and it will go down. As you can see, you only trade when this happens, you do not anticipate and trade before it crosses. You will see the signal will be made when the MACD is overbough or it will be oversold, that is when it will crossover and at the same time the price will go past the SMA. This means that when trend is downfall you will have to wait for price to correct itself above moving average. So when this event happens you will get signal when MACD oscillator is on the overbough side and of course makes bearish cross over. You can predict this cross over with MACD histogram. Check also the picture and you will see what i mean.
This is a very well thought strategy even for beginners as we said but that does not mean it is not good for expirienced traders aswell. You can use this strategy for every asset you wish to trade on any time frame basicly. But please have in mind money management at all times. As you see it also does not need to check multiple time frames but it will not hurt if you do your analysis since you can only benefit from that. Even though it is simple strategy it can be very well trusted since it give you the right trend and momentum from which you can see signals to use for binary options trading.
We are covering everything from a start on how to trade binary options, what to focus on, what brokers are good and can be trusted, what strategies and tools you should use but let us focus on how not to trade binary options here. Some people even think that wearing certain type of ring or bracelet or anything like that can give them better chance of winning while it is only them who can do that. Because binary options trading is not based on some random events or moving planets or anything like this. It is purely based on dedication, patience and focus you show and give.
LUCK IN BINARY OPTIONS
There is alot of methods that are alternative and people trust them becuase it gives them an extra security. Within that we have lucky charms, they can do some rituals or go to astrologer. There are other aswell. This kind of tactics may only imporve your psychology level it has nothing to do with actual trading since these are superstitions. If you check online on wikipedia, they say luck is:
The definition of Luck (or chance) varies by philosophical, religious, mystical, or emotional context of the one interpreting it; according to the classic Noah Webster’s dictionary, Luck is “a purposeless, unpredictable and uncontrollable force that shapes events favorably or unfavorably for an individual, group or cause”.Yet, the author Max Gunther defines it as “events that influence one’s life and are seemingly beyond one’s control”.
As you can see luck is beyond control and it is something you can not affect by only desire. You are basicly waiting for a miracle to happen, in this case luck that will bring you profit because you are wearing your lucky underwear for example. Even if you did have a lucky strike, it was because of yourself not pair of undies since luck does not know what is good or what is not. As you can see now, luck is something that is totally random. If you think and focus you will see, everyone from time to time wishes for some luck even though we all know how the world, real world works.
ASTROLOGY IN BINARY OPTIONS
Ok, so maybe if luck does not ahve anything to help you out as a trader then astrology definitely can, right? Wrong. You may know that astrology is actually based on time and that is why the assumption that trading and astrology should go together really well. If you do not know what astrology is, you must read this first:
Astrology consists of several systems of divinationbased on the premise that there is a relationship between astronomical phenomena and events in the human world. Many cultures have attached importance to astronomical events, and the Indians, Chinese, and Mayans developed elaborate systems for predicting terrestrial events from celestial observations. In the West, astrology most often consists of a system of horoscopes that claim to explain aspects of a person’s personality and predict future events in their life based on the positions of the sun, moon, and other planetary objects at the time of their birth.
There were actually some trading system based on the astrology but they are not working in long-term as expected. For example, astrologist are prepared to create you a chart for each company you want to trade so he can tell you then when its the appropriate time for executing the trade. There are other methods aswell but there is no point no revealling such things because this is not possible. This is something you have to learn and do on your own. You are the luck creator.
You saw that luck is something random and relying on astrology is also not gonna work but you can always relly on yourself. You just have to practice and dedicate yourself to this. It is not easy but it will work if you will learn hard and start practicing. To make your own luck is basicly that you put yourself on the right spot at the perfect timing. If we do example in binary options, this would mean that you would know for earning announcement and you already did your reserach and anticipated in which direction it will go. That is how you create it!
When you are new to trading it can be confusing when you see how many indicators and tools are available for trading. Some of them are good but some are also bad and not that good. That is why you can check here descriptions of top ones that would be recommended for binary options beginner. If you learn all of the below listed, it will definitely provide you with solid foundation for future trading strategies that are more advanced.
Candlesticks basic trading – Japanese candlestick are one of the best ways that you can view the charts and get an idea where it will go. It gives you the most information. It is more then hundred years old which means it will not die in near future. You can see that each candle represent where it was opened and closed and they are also colored so you can identify if the price is up or down. If you are not familiar with them, then this is a must read for you.
Fibonacci miracle trading – If you are not familiar with who Fibonacci is then i can suggest that you should leanr about it since it is very interesting. If we make this story short for you, he was a mathematician who has seen that nature around us was rules with a set of simple ratios. He found them everywhere around him in everything. His numbers are nowadays used to measure the market in several ways but most useful for new traders is definitely fibonacci retracement tool. When you activate this tool on your charts it will show some good prediction of support and also about resistance based on the provided chart you are looking at that moment.
Moving average tool – There are many trades that are successful that use momentum for their trading profits therefore this is one of basics when it comes to technical analysis principals. This is definitely one of top tools if you want to meausre momentum. It utilizes two moving averages and then it measures the distance that is beetwen both of them. With this as we said you will easily identify also support and resistance and when to enter a trade.
Time Series Forecast Indicator – This many sound complicated but it is actually easy to use since it provides you clear signal for trading short term. But if you use this indicator and combine it with others it can become even better. THe indicator uses multiple linear regression which will show you the movement for future. A signal is simple as croosing above or below.
Force indicator – This is an oscillator which was made by Alexander Elder. He is a trader that is trading commodites and also a book author such as “trading for a living”. This is indicator that showy you momentum but based on volume and direction. It can help you to determine support or resistance and also trend.
You need to go through all of them in order to be a good trader that has a good base of knowledge. Based on these you can go into more advanced strategies later on. Also do not forget to join our community.
We have checked many different strategies and some can be used for binary options and others not. You can see here five strategies that you can apply to binary options even if you are novice trader. There are also better, highly efficient strategies but they require much more knowledge and expirience from the market that is why they are not recommended for traders that are new to this. Strategies that you will read will be easy to understand for you and will give you a good base for your future trading expirience. Click on the one you wish to read in more detail.
MACD ENTRY STRATEGY
Macd entry strategy – MACD or in long, Moving Average Convergence Divergence is an indicator we use here and is best for short term charts such as 5 minutes. It uses two moving averages and also the MACD histogram to determine the trend by following singals. Although it is good to use it on short time charts, it also can be used for longer time frames.
TREND IS THE FRIEND
Trend is the friend – It is one of well known things in trading because following trend strategy will always be here. But it takes you some time to understand how to take it and turn that into profit. You will get to know how to use trend lines and trade with them. You can also use this strategy for other more hard strategies.
Pinocchio strategy – This strategy is based on price action signal such as pin bar. This is actually known as shooting star in technical analysis based on candle sticks. The nam itself does not matter that much but you will learn how to identify support and resistance.
BINARY OPTIONS HEDGING
Hedging strategy – Hedging is actually really important for tradinf of any kind. It is something that you need to practice to protect your account by opening trading positions that are off-set. This means you will protect yourself from losses and help yourself to profits. With this information in the article you will see how to hedge in binary options even though they are simple form of trading.
1-2-3 SYSTEM STRATEGY
1-2-3 system strategy – it is based on price action focusing on reversals. System is relying on reversal patterns that are forming at support or resistance and it has been used for decades. It is great for a novice trader since it is really simple tos tart with and later can be used with other strategies.
These are the strategies that you should atleast read if not learn. They will represent you a base for future trading. To learn more, i would recommend you to join our community and learn in the school section.