Identifying Chart Patterns

Strategy’s Outlook:

Pattern recognition is a very popular trading strategy based on technical analysis chart patterns. Financial markets tend to move in certain patterns and those traders capable of identifying some of these patterns may increase significantly their likelihood of winning. Identifying patterns as a method can be combined with other trading strategies and be used to confirm the entry/exit signals of other trading methods. Trading patterns recognition as a method is a much more reliable method in mid-term and long-term trading periods than in short-term periods.

What is a Chart Pattern?

A chart pattern means a distinct price formation presented on the chart. There are many different types of chart patterns, in this article, you can find the most important patterns. Patterns can not forecast the future but it can help traders increase their likelihood of winning. In general, we can distinguish two main types of Chart Patterns:

(1) Continuation Chart Patterns

(2) Reversal Chart Patterns 

1. MAJOR CONTINUATION CHART PATTERNS

Definition: Continuation chart patterns signaling that a price trend will continue.


 

1.1 Cup & Handle Chart Pattern

Cup & handle formation suggest that a price trend has paused for a while but it will not probably be reversed. When this formation is confirmed then a price trend becomes even stronger.

Timeframe: Cup & Handle pattern can be best identified in charts from 1-month chart to 1-year.

Support and Resistance Binary Options Trading Strategy

Identifying major Support and Resistance levels is one of the most crucial issues of technical analysis.

 

What is Support and Resistance?

■ Support levels are the historical price levels which an asset or an index has shown difficulty falling below. At those levels a lot of traders tend to buy the market (Enforced Demand).

■ Resistance levels are the historical price levels which an asset or an index has shown difficulty break through. At those levels a lot of traders tend to sell the market (Enforced Supply).

 

Support & Resistance Timeframes

Traders have to be always aware of the close support and resistance levels of their trades, no matter their timeframe.

■ Short-Term Support & Resistance (one day to one month)

■ Mid-Term Support & Resistance (one month to one year)

■ Long-Term Support & Resistance (one year to several decades)

Support & Resistance levels are not changing as Oscillators, Trend-lines etc. Support & Resistance levels are usually characterized by stability over time.

 

 

How Support & Resistance Levels are Formed?

Support & Resistance levels are basically psychological levels of demand and supply. The more times an asset / index has proved unsuccessful in breaking certain price levels the stronger the perception of the existence of certain support / resistance on these levels.

Chart: Support Levels

News-Trading Strategy for Binary Option Traders

News-Trading is a fundamental-analysis strategy that is based on the upcoming economic calendar.

News-Trading focus on short-term periods and can be used for trading 1 minute, 2 minutes and 5 minutes binary options (Turbo Options). Most of the news releases have a short-term effect but there are also news releases with a long-term effect on global markets. The mission for every News-Trader is to track important news releases and trade the right direction of the news impact.

 

What is Event-Trading and Market Expectations all about?

Every major economic, social, politic or military event has a particular influence on the global financial markets. Even a weather forecast can highly influence the global markets (especially energy assets). Some events have a tremendous effect on financial markets while some other events have a minor effect. What is important isn’t just the event itself -It is of equal importance what the market really expects about certain events.

Three Factors affecting News Trading

■ The Nature and the Significance of the News Release (For example an important macroeconomic event such is an interest rate cut)

■ Market Expectation about this Event / News Release

■ The difference between the Market Expectations and the Actual Event

What means Market Expectations?

When we are referring to market expectations we are mainly referring to the results of the research of specialized analysts. These analysts who may work for a Financial Company, a Governemnet Body or to be completely Independent have the ability to influence all kind of market participants.

Example of an Important Macroeconomic Event

Let’s suppose that our market is Forex and the market expects that the ECB (European Central Bank) will cut Euro interest rates by 0.25% (hypothetically 0.50% currently).

Suddenly ECB doesn’t cut the Euro rates but in addition it presents a scenario of future interest rate increase based on inflationary concerns.

Can you imagine what happens next?

Euro against the other Majors, for example against USD, will probably gain 2,000 pips in the next few minutes. In the following chart you may observe the effect of important news on EURUSD.

Follow-The-Trend Binary Options Trading Strategy & 5 Ways to Identify Trends

Follow-the-Trend is maybe the most popular strategy to trade any financial market using any financial instrument. As they say, the trend is your best friend.

In this article you can find information about how to “Follow-the-Trend” using binary options but also 5 different ways to identify trends using technical analysis.

 

Follow-the-Trend Strategy Outlook

Financial markets tend to follow certain trends. Actually they constantly follow a certain trend until that trend is temporary disturbed by a short-term price pullback or it is fully reversed and a new trend is emerging at the opposite direction (reversals).

Trend Continuation is the Best Strategy to Trade High / Low Options

When you trade High / Low binary options it is better to seek for trend continuation than for trend reversal. On the contrary when you trade Touch Options or Range Options reversals can prove a successful choice.

Follow-the-Trend strategy is the best strategy to profit from 60-second binaries trading. This strategy has a proven record of success while it is really easy to be implemented by any trader. The power of this strategy relies on statistics.

Statistics have shown that there is always a better likehood that a trend will continue than a trend will be reversed.

In order to apply 'Follow-the-Trend' Strategy with success you certainly need a basic understanding of technical analysis and charting. In this article you will be able to find all the basic information about how to recognize and to use trends.

 

The ‘Follow-the-Trend’ Trading Strategy Implementation

When the existence of a trend is confirmed the only thing you have to do is to execute a trade in the same direction. Here are some easy steps to apply the strategy.

The ‘Marida’ Type of Traders

Many Binary Options Traders think that they can become rich in a couple of days, this kind of traders are what is called in my country “The Marida” traders. Actually, Marida is a tiny kind of fish that feeds a lot of undersea predators. Either you are trading Binary Options or any other kind of financial instrument (Shares, Forex or CFDs) never join the Merida team.

A Winning Strategy
 
True Vs False Instinct
 
A true trading instinct derives only from experience. If you are a beginner and you feel like having an instinct you are just wrong. It is just a game of your brain, it makes you feel have something just because it needs to boost your confidence or because it is just bored and needs some adrenaline to flow into your veins. Confidence will not make you rich in the future, neither adrenaline, what can make your rich in the future is knowledge, experience, and strategy.
Avoid false instincts and try to concentrate into facts and figures while doing your math. If you are a beginner, use a demo account, and by this way, buy some trading experience for free.
In order to define a winning strategy, we must first understand what I call as the ‘Trading Triangle’. The ‘Marida team’, mentioned before, has usually no strategy and ignores completely the following triangle.
 
Shape: The Trading Triangle
What characterizes the above Trading Triangle is velocity. Each time you push one side (Performance, Risk or Time Frame) the other two sides are widening. So, if you want to achieve high profits (Performance) in short periods then your trading risk is expected to climb. From the other hand, if you seek to reduce your portfolio risk then your expected return should be lower and your time frame should get wider.

Based on this simple model is very easy to understand why you need to widen your time frames to trade any market. A wide trading time frame maximizes your profit potential while it minimizes your overall trading risk. Proof comes from statistics, 99% of all day traders are loosing their total capital after some time. Simply because when you are trading on a daily basis, your trading cost (commissions etc) is getting very wide and that means your profit potential is minimized. It is better not to become a day-trader. Take long-term positions and make clear decisions, always avoid time pressure.


Strategy -The Trading Triangle
George M. Protonotarios
ForexExperts.net

Fibonacci Retracements Binary Options Strategy

 

This is a price-reversal strategy based on pre-defined retracement levels as you will see below. The Fibonacci method is a pure technical analysis method deriving from the Fibonacci sequence of numbers.

 

Information -What is the Fibonacci sequence of numbers?

Fibonacci was a famous Italian mathematician who lived during the late 12th and early 13th century. Fibonacci spread the Hindu-Arabic numerical system in Europe. The Fibonacci sequence of numbers is a sequence that follows a certain rule, every number equals the sum of the two previous numbers. Here are the first 12 digits of Fibonacci sequence:

1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233

This sequence of numbers is directly linked with the Golden Ratio or Phi or Φ {Φ=1.61803….). This number 1.618 is found everywhere in our universe. It is found between the distances of planets in our solar system, it is found on earth’s nature, it is found in our human body’s anatomy and it is also found on the global financial markets. On this article we are going to focus solely on the Fibonacci Retracements and not on the Golden Ratio’s effect in the financial markets.

 

The Fibonacci Retracements Binary Options Strategy

The Fibonacci Retracements Levels

The Fibonacci Retracements Binary Options Strategy is a pure price reversal trading strategy based on certain price retracement levels. The three (3) Fibonacci Retracements have the following values:

■ 38.2% (not very important level)

■ 50.0% (important level

■ 61.8% (very-important level)

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