(+) Beginner Trading Strategies

Identifying Chart Patterns

Strategy’s Outlook:

Pattern recognition is a widely used trading strategy based on technical analysis of chart patterns. Financial markets tend to move in certain patterns, and traders who can identify these patterns may significantly increase their chances of success. Pattern recognition can also be combined with other trading strategies to confirm entry and exit signals. This method tends to be more reliable in mid-term and long-term trading than in short-term periods.

What Is a Chart Pattern?

A chart pattern is a distinct price formation displayed on a chart. There are many types of chart patterns; this article covers the most important ones. While patterns cannot predict the future, they can help traders improve their chances of winning. Generally, chart patterns fall into two main categories:

(1) Continuation Chart Patterns

(2) Reversal Chart Patterns

1. MAJOR CONTINUATION CHART PATTERNS

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

1.1 Cup & Handle Chart Pattern

The Cup & Handle formation suggests that a price trend has paused temporarily but is unlikely to reverse. Once this pattern is confirmed, the price trend often becomes even stronger.

Timeframe: The Cup & Handle pattern is best identified on charts ranging from 1 month to 1 year.

Read more: Identifying Chart Patterns

Support and Resistance Trading Strategy

Support and resistance levels are essentially psychological zones of demand and supply, and identifying them is one of the most critical aspects of technical analysis.

📈 What is Support and Resistance?

Support is a price level where buying pressure tends to prevent further decline, effectively acting as a floor. Resistance is a level where selling pressure typically halts price advances, acting as a ceiling. When the price breaks through either level, it often signals a potential trend continuation or reversal.

■ Support levels are historical price points at which an asset or index has shown difficulty falling below. At these levels, many traders tend to buy the market (enforced demand).

■ Resistance levels are historical price points at which an asset or index has shown difficulty breaking through. At these levels, many traders tend to sell the market (enforced supply).

Support & Resistance Timeframes

Traders must always be aware of the nearby support and resistance levels relevant to their trades, regardless of the 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 and resistance levels do not change in the same way as oscillators or trendlines. These levels are generally characterized by their stability over time.

📝 How Are These Support & Resistance Levels Formed?

In technical analysis, trend lines are diagonal lines drawn by connecting key swing lows in an uptrend or swing highs in a downtrend. These lines visually represent support and resistance levels and help identify the overall market direction. An uptrend is defined by a series of higher highs and higher lows, while a downtrend is characterized by lower highs and lower lows.

Read more: Support and Resistance Trading Strategy

Exploring the News-Trading Strategy

News trading is a fundamental analysis strategy based on the upcoming economic calendar.

News trading focuses on short-term periods and is often used for trading 1-minute, 2-minute, and 5-minute binary options (Turbo Options). Most news releases have a short-term impact, though some can affect global markets in the long term. The goal for every news trader is to track important news releases and trade in the direction of the news impact.

📈 Event-Trading and Market Expectations

Every major economic, social, political, or military event influences global financial markets. Even something like a weather forecast can significantly impact markets—especially energy assets. Some events have a tremendous effect, while others have a minor impact. What matters isn’t just the event itself, but equally what the market actually expects regarding that event.

Three Factors Affecting News Trading

■ The nature and significance of the news release (for example, an important macroeconomic event like an interest rate cut)

■ Market expectations about this event or news release

■ The difference between market expectations and the actual event

What Does Market Expectations Mean?

Market expectations mainly refer to the forecasts and research conducted by specialized analysts. These analysts—whether working for financial companies, government bodies, or independently—can influence all types of market participants.

Example of an Important Macroeconomic Event

Suppose we are trading Forex, and the market expects the ECB (European Central Bank) to cut Euro interest rates by 0.25% (hypothetically from 0.50% currently). Suddenly, the ECB does not cut rates but instead signals a future rate increase due to inflation concerns.

Can you imagine what happens next?

The Euro, against other major currencies like the USD, will likely gain around 2,000 pips within minutes. The following chart illustrates the impact of important news on EURUSD.

Read more: News-Trading Strategy

Follow-The-Trend Strategy & 5 Ways to Identify Trends

Follow-the-Trend is perhaps the most popular strategy for trading any financial market with any financial instrument. As the saying goes, the trend is your best friend. In this article, you will find information on how to “Follow-the-Trend”, along with five different ways to identify trends through technical analysis.

📈 Follow-the-Trend Strategy Outlook

Financial markets tend to follow certain trends. They usually maintain a trend until it is temporarily interrupted by a short-term price pullback or fully reversed, leading to a new trend emerging in the opposite direction (reversals).

Trend Continuation is the Best Strategy

✅ It is better to focus on trend continuation rather than trend reversal.

✅ The Follow-the-Trend strategy is the best approach for profiting from any market, this strategy has a proven track record and is easy for any trader to implement.

✅ Its strength lies in statistics. Statistics show that a trend is more likely to continue than to reverse.

To apply the Follow-the-Trend strategy successfully, you need a basic understanding of technical analysis and charting. This article provides all the essential information on how to recognize and use trends.

♞ The ‘Follow-the-Trend’ Trading Strategy Implementation

Once a trend is confirmed, all you need to do is execute a trade in the same direction. Here are some simple steps to apply the strategy effectively.

Read more: Follow-The-Trend Strategy

Introducing the ‘Marida’ Type of Traders

Many traders believe they can become rich in just a few days. In my country, this type of trader is referred to as a “Marida” trader. Marida is a small fish that serves as food for many underwater predators. Whether you are trading Binary Options or any other financial instrument—such as Shares, Forex, or CFDs—you should never join the Marida team.

Shape: The Trading Triangle

What characterizes the Trading Triangle is velocity. Whenever you push one side (Performance, Risk, or Time Frame), the other two sides expand. So, if you want to achieve high profits (Performance) in a short period, your trading risk is expected to increase. Conversely, if you aim to reduce your portfolio risk, your expected return will be lower, and your time frame should be longer.

Based on this simple model, it’s easy to understand why you need to extend your time frames when trading any market. A longer trading time frame maximizes your profit potential while minimizing your overall trading risk. Statistics support this: 99% of day traders lose their entire capital over time. This is mainly because trading daily increases costs (commissions, etc.), which reduces profit potential. It’s better not to be a day trader. Instead, take long-term positions, make clear decisions, and always avoid time pressure.

□ Strategy -The Trading Triangle

Fibonacci Retracements Trading Strategy

 This is a price-reversal strategy based on predefined retracement levels, as you will see below. The Fibonacci method is a purely technical analysis approach derived from the Fibonacci number sequence.

📈 Information -What is the Fibonacci sequence of numbers?

Fibonacci was a famous Italian mathematician who lived during the late 12th and early 13th centuries. He introduced the Hindu-Arabic numerical system to Europe. The Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones. Here are the first 12 numbers of the Fibonacci sequence:

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

This sequence is directly connected to the Golden Ratio, also known as Phi or Φ (Φ = 1.61803…). The number 1.618 appears throughout the universe: in the distances between planets in our solar system, in nature on Earth, in human anatomy, and even in global financial markets. In this article, we will focus solely on Fibonacci retracements, not on the Golden Ratio’s influence on financial markets.

🔗 More at TradingFibonacci.com:

♞ The Fibonacci Retracements Trading Strategy

The Fibonacci Retracement Levels

The Fibonacci Retracement Strategy is a pure price reversal trading approach based on specific price retracement levels. The three key Fibonacci retracement levels are:

■ 38.2% (less significant level)

■ 50.0% (important level)

■ 61.8% (highly important level)

Read more: Fibonacci Retracements Strategy