Candlestick-Chart analysieren – Binare Optionen 2020

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How can I use candlestick chart to trade binary options?

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The Japanese method of analysis has been developing for centuries, when in America they didn’t even know what a stock market is. At this time the Japanese were already trading futures on their rice.

In fact, the Japanese candles contain a lot of information and wonderfully reflect the psychology of trading. All Japanese models are explained from the psychological point of view, that is why they do work, but not everywhere.

The most important rule is a dense connection of candlestick configurations and signals of technical indicators and volume. Trading solely on candle figures is forbidden. T.

Charts and Analysis

To make it in this business you do not really need a degree in economics or to be super smart mathematician. Its just to get knowledge and to follow rules. If you are able to do that, then you have good option to succeed. All trading world depends on simple supply and demand as all business world as well. I am sure you know what that means but lets take a look at simple example in practice to make it more familiar and understandable.

What you will learn in this article:

  • What are charts?
  • How many types of charts exist?
  • How to use them for your benefit!
  • Where to read charts?
  • What is analysis?
  • What types of analysis exist?

If we go back to the example i mentioned, let us think of high-end whiskey brand where supply of them is low because there is only one manufacturer and it takes them years to put the product on the shelves for the public to buy it. On the other side, we have apple fruit where supply is high since there is many people out there that is growing and providing them.

Now, if we take a look and focus at the price, if supply of one thing is low that means the price is high since there is more demand for such product and if there is a lot of supply as we said with apples, then the prices are lower. That is also how financial industry works, based on supply and demand, only thing different is they don’t use apples and whiskey but financial products.

CHARTS

All the assets can be shown on a chart that’s why you can not trade without one. Its a graphical presentation of chosen asset with a defined period of time. If you did not know, there is many different types of charts out there but only one i would recommend are candlesticks. This type of chart provides us with the most info on the asset and gives us better insight on how it performs. Based on the charts we can see the past performance of one asset in certain period of time and based on that and also fundamental analysis we can predict where the price will go next.

WHAT TYPE OF CHARTS EXIST?

We have 4 different types of charts that traders and investors use to get their information. They are called: bar chart, line chart, candlestick chart and point&figure chart.

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LINE CHART

This one is really basic and as the name suggest you can already presume its a line and it represents closing prices of asset through period of time. To get the line you basically connect the dots of closing prices. Since the most considered and important is the closing price some use this chart to get the idea on where the asset will go but there is no other information available such as opening prices and high/low.

BAR CHART

Bar chart is an upgrade to the line chart since it gives us more information. As you can see it is made of lines that are vertical and each of them represent a point with information which is high and low for this period and you also get to know at what price it has closed. opening and closing can be seen by horizontal line or dash on it. Opening price is located on the left side since we are going from left to the right, so the closing price is on the right side.

This chart is similar to bar chart, only difference is the structure of it since it is visually different. We also have thin vertical line in candlestick charts which represents certain period range. But then we have a bigger body, wider on this same vertical line which illustrates the open and close of this time period that candlestick represent. Another thing is that when its going up its different color then when its going down. You can see that here:

and next take a look at how it looks in a chart as a whole:

POINT&FIGURE CHART

This is not very well known chart and most traders and investors do not use it. We will just cover it so you are aware of it. As you can see it represents from X-s and O-s. It is simple since X represent the trend of the price that is moving upwards and O represents the trend of the price that is going down.

WHERE TO READ CHARTS?

METATRADER 4. This is one of the best source for free charting info. You should download the software and connect it with one of the best forex brokers so thy send you right info and choose one that has a lot of options in it so you get all the info needed. http://www.metatrader4.com/

MULTICHARTS. This is also downloadable product that gives you high quality charts. Visit here: http://www.multicharts.com/

FREE STOCK CHARTS. You do not need much info on this one, i suggest you visit it here: http://www.freestockcharts.com/

ANALYSIS

What is analysis? With this, you analyse the potential trade. It is a must before trade, otherwise you can lose all the money you have. Of course you can complicate things, but as they say, simple is the best also applies here. Everyone has their own strategy but since you are a beginner i would recommend following the trend and make analysis based on that.

FUNDAMENTAL ANALYSIS

This means you get and study the info that is provided from different news sources which affect the movement of the price of a certain asset. May be, there are some changes in European bank system or there are some problems or someone is taking legal actions against company. This all, takes the price up or down. That is why this analysis is important when trading.

TECHNICAL ANALYSIS

Here you apply your own terms and strategies on where the price should go. You can use indicators, different type of charts, different time frames. Here you have no limit since people have different methods. You want to predict in which way in certain time frame the asset will move based on information from the past. That is why it is good if you use both of analysis together to determine.

FINAL PARTS

Now you have more clear vision how the whole market in finance works and that with little knowledge and analysis you increase your chance of profits and success in long-term. Also, do not forget, to not over-trade, only trade when you have facts in place and you are sure of the trade.

7 Candlestick Formations Every Binary Options Trader Must Know

Most binary option traders use Japanese candlestick charts for technical analysis. Some choose to trade using tick charts but in most cases it’s the 300 year-old candlestick chart system that is still in use today.

The closest thing to the actual price is the price data itself and the candlestick chart represents current price data and its direct supply and demand dynamics which translates into investors’ mind-set.

The candlestick formations illustrated below are especially helpful in trading binary options because they signal an upcoming correction or a change of trend.

1. The Doji

The length of a Doji may very but a perfect one would be with the same opening and closing price, so visually as thin as a thin line. If a Doji appears in a sideways market it is insignificant but if it appears alone and at the peak of a trend, a watchful binary options trader should take notice and prepare for a sudden possible reversal. If you’re using Bollinger Bands and the price action is touching or beyond the bands the presence of a Doji may signal a quick correction or a trend change. The Doji can appear in the bullish and bearish markets. The picture illustrates a Doji that could also be seen as a Spinning Top, but both candles signify market indecision. Download a Doji Indicator for MT4

2. The Dragonfly Doji

The appearance of a Dragonfly Doji candle at the end of a downtrend is very bullish. It basically shows that the sellers were able to drive the price lower but were unable to sustain the downward price movement because the price closed at the same amount it opened. This may indicate an upcoming bullish movement and quite possibly a strong upward trend. The signal marked by a Dragonfly Doij can be much stronger when it touches support resistance lines or Fibonacci retracement lines.

3. The Gravestone Doji

If the upper shadow is very long it means the sentiment is bearish. What happens during the defined time of the candle is prices open and trade high and then return to the opening price. This type of movement shows that investors rallied but failed to reach a higher price. This shows a bearish sentiment and if this candle formation is seen touching resistance lines, or Bollinger bands or Fibonacci levels, than it may signal an upcoming reversal. Download Fibonacci Doji/Pin bar MT4 Indicator

4. The Hammer

This pattern has a small real body and a long lower shadow which must be at least twice the length of the body. Hammers appear in the downtrend market and they derive their name from trying to ‘hammer out the bottom’ of the trend. A Hammer shows that buyers, despite the bearish sentiment, were able to push the prices higher than the opening price. This failure of the sellers reduces the bearish sentiment and may signal a trend reversal.

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5. The Hanging Man

The Hanging Man is essentially The Hammer but it appears at the top of a trend or in an uptrend. In order for the Hanging Man to form the price action must trade much lower than the opening price and then rally to close near the high. This forms long lower shadow and may signal that the market will begin a selloff and a possible reversal will start soon. The Hanging Man with a black or red (depending on your candlestick configurations) real body is more bearish than one with a full or green body.

6. The Belt Hold – Bullish & Bearish

A Belt Hold consists of two real bodies of opposite colour. It forms when the market is trending and a significant gap occurs in the direction of the trend on the open but the trend reverses and the candle goes into the opposite direction, Bullish Belt Hold or Bearish Belt Hold, sometimes engulfing the previous candle and changing the trend. The Belt Hold candle formation signifies a change of investor’s mind set and is a sign of a possible reversal and trend change.

7. The Harami Patterns

The Harami pattern can be bullish or bearish and is similar to the Belt Hold. It also consists of two candles with real bodies of opposite color but the open price of the second candle is within the close price of the previous candle. The second candle, although it closes in the opposite direction it does not engulf the previous candle entirely as in The Belt Hold. A lack of upper shadow (in downward trend) or lower shadow (in upward trend) of the second candle indicates a stronger trend.

Conclusion

The are many more candlestick patters that we will examine in other lessons but these are good to watch out for when you trade binary options.

Knowing how to read candle stick price patterns will also be helpful in confirming binary options signals, should you decide to use them.

It’s important to understand that candlestick patterns have a higher success rate on upper time frames, 4H and up. They can also be considered on the 5 or 15 minute charts, but 1 minute candlestick formations might not be reliable.

Candlestick charts work well on their own and if you learn to read them well, you will understand certain market sentiments that will definitely improve your trading.

It is advisable to view candlestick charts with Bollinger Bands (moving Averages) and/or other indicators. Using too many technical indicators can be very distracting. It’s best to focus on price action and then confirm it with maximum 2-3 other indicators and volumes.

Master your trading skills with the The Candlestick Bible that reveals in detail the candlestick trading techniques used professional and successful traders.

Best Binary Options Strategies

Jay Hawk
Contributor, Benzinga

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Binary options offer financial markets speculators an easy way to trade with limited downside risk. Unlike the underlying assets themselves that have potentially unlimited trading risk, binary purchases generally require a fixed price or premium to perhaps receive a given payout.

A major advantage of using binaries arises from eliminating the risk of order slippage that can occur in especially volatile markets. Not all binary option types suit all market views, so it makes sense to study what each type has to offer.

Before trading binaries, choose a reputable binary option broker and work out a binary strategy that remains a winning strategy on a consistent basis.

Quick Look: The Best Binary Options Strategies

  • Directional or Trend Trading
  • Swing Trading
  • Range and Range Breakout Trading
  • News Trading
  • Candlestick Pattern Trading
Table of contents [ Hide ]

Overview: Binary Options Strategies

The key elements of your binary options trading strategy should include:

  1. The type of binary option used
  2. When to use it
  3. The amount to trade
  4. Your exit plan.

You will also want to determine what the best binary options type will be for your particular trading style and objectives.

For example, many binary option brokers will provide pricing in up/down, one or no touch, boundary and double one or no touch binary options. Each of these types can suit a particular directional view.

What Makes A Great Binary Options Strategy?

As most experienced traders will tell you, the binary option trading strategy you choose paves the way for your eventual success or failure. In general, a great binary option strategy will be one that involves a trading method or which generates a signal that makes your binary option trades consistently profitable.

Some of the best binary option strategies operate in very short time frames suitable for short term expirations of one minute to one hour. Other strategies might focus on forecasting end-of-day or end-of-week levels that correspond to daily or weekly close binary expirations.

Any great trading strategy consists of one that works in practice to generate respectable profits given the time invested. Also, test a strategy in a demo account and have a sound money management strategy to complement your trading signals.

The sections below will discuss some of the more popular trading strategies that binary option traders use. You can also combine some of these strategies or create your own from a combination of technical trading signals.

Strategy 1: Directional or Trend Trading

When an asset’s price or an exchange rate generally moves in one direction or the other within a given time period, a trend exists in the direction of the overall movement.

If the market value moves upward and makes higher highs in the process, it forms an uptrend. Conversely, if the market generally declines and makes a series of lower lows, it creates a downtrend. Trends can show up on charts on any time frame, so binary option traders can usually trade them effectively. The schematic diagram below shows what uptrends and downtrends look like.

Those who trade trends with binary options generally overlook small swings in market valuation. Instead, they put their attention on discerning the overall directional move within a particular time frame using technical analysis techniques and indicators.

Trend trading involves taking fewer positions for bigger gains than most other trading strategies, so commissions usually seem minimal. A trend trading strategy seems appropriate to use with high-commission brokers that offer a wider range of binary products and asset classes.

A popular trend trading method, which virtually all binary options brokers offer, involves the use of the call/put binary option. A call binary option pays off if an asset’s price ends up higher than its strike price after a set period of time. A put binary option pays off if the value finishes lower than its strike price.

Trend traders can also use the riskier, but potentially more profitable, one-touch binary option. This involves predicting a target level that you expect the market will reach within the trend to achieve a payout once that level trades.

Some trend traders even use a combination of both binary option types. This generally costs less than using call/put binaries and helps them increase potential profits if their directional view pans out.

Strategy 2: Swing Trading

Instead of trading the overall trend, you could achieve higher gains by trading each swing in an asset’s value as it moves up and down in a non-linear fashion. Such price swings also tend to occur in predictable patterns and proportions. This can give savvy binary option traders an opportunity to profit.

While trend traders tend to ignore these market fluctuations by focusing on the overall direction, swing traders nimbly switch directions to profit from them. Swing traders tend to trade more often than trend traders, which can increase transaction costs.

Swing trading also involves having a good sense of market momentum. This requires you to reverse positions when market trends wane, while holding positions in the direction of the trend while the trend remains strong.

As a swing trader, you have several chances to use binaries to benefit from a trend and its various corrections, instead of just holding a binary option position in the direction of the trend. Since these swings tend to be of a shorter-term duration than the overall trend, you can often position for them using binary options.

For example, you could buy a call binary when a downswing occurs within an upwards trend in anticipation of a subsequent move higher. In another scenario, you could purchase a put binary when an upswing materializes in a downtrend, since the market might then reverse and continue its overall move lower.

Furthermore, you can buy a put or call binary when the market looks respectively overbought or oversold in anticipation of a counter-trend correction.

Strategy 3: Range and Range Breakout Trading

Range and range breakout traders consist of those who identify trading ranges and attempt to profit from them. Trading ranges occur when a market fluctuates within upper and lower boundaries.

If you plan on employing a range trading or breakout strategy, you will tend to use boundary binary options. In boundary binaries involve setting an upper and lower value that you expect the market will remain between by the time the option expires.

Alternatively, if you wish to trade a breakout of a trading range, you can instead use an out boundary binary option. This lets you set a range with boundary levels that you expect the market to trade outside of at expiration.

Strategy 4: News Trading

Fundamental traders sometimes rely on key news releases to create market volatility they can profit from. When a news outcome improves on the market’s consensus, the result seems favorable for the asset or currency affected. This typically leads to a higher market valuation. Conversely, when the result disappoints the market, a negative effect on valuation tends to occur.

One of the major risks involved in trading such news events consists of stop-loss order slippage. Requotes and/or market order execution delays can also result in a serious unanticipated loss for a trader. These issues seem especially likely to occur even with reputable brokers in the volatile or “fast” markets surrounding a key news release.

Using binary options to trade the news can eliminate this execution risk completely and make a news trading strategy much safer. Still, it pays to keep in mind that news trading outcomes remain quite unpredictable due to significant variation in the size and duration of news-related moves.

Depending on what you expect to occur, these possible binary option alternatives could fit into a news trading strategy:

  • If you expect a large move in either direction by expiration, you can buy an out boundary option. This pays off if the market ends up outside the specified range upon expiry.
  • If you expect a large move in either direction shortly after the news release, you can buy a double one-touch binary that pays off if either trigger level gets breached before expiration. The trigger options used in this strategy will often have a very short time until expiration, such as 60 seconds, to maximize returns and minimize cost.

If you observe a large move shortly after the news release and you expect a retracement to follow, then you can buy a call binary if the market fell after the release or a put binary if the market rose. If the market does indeed snap back, then buy a put binary once the correction higher seems to wane or a call binary if the correction lower starts to fade.

Assuming both options have the same strike price, the goal of this news strategy involves legging into a long binary straddle position that has a 100% chance of paying out no matter whether the market rises, falls or stays the same.

Strategy 5: Candlestick pattern trading

Candlestick charts display some well-defined patterns that technical analysts often consider to have predictive value. While a detailed discussion of how to trade based on candlestick formations seems outside the scope of this article, an excellent book to learn about with the subject in detail is Japanese Candlestick Charting Techniques by Steve Nilson.

An example of a candlestick pattern you can use in binary option trading: if you observe a gap on the candlestick chart under normal trading conditions, then it may indicate a future move in the direction of the gap.

For example, if the market gapped higher, it would suggest purchasing a binary call option. A gap to the downside would indicate buying a put binary.

Final Thoughts

Binary option strategies can only get you so far, since your broker and various other factors can also impact your success. Selecting a suitable trading partner from among the best binary option brokers for your trading style and strategy contributes another key element to a winning binary option trading plan.

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