Archive | Binary Option Indicators

How To Trade Binary Using Doji Candlestick

This is another important candlestick pattern that you can use when trading binary option.

The doji candlestick is a typical reversal candlestick pattern which gives us a signal that the price is going to move back soon. The reversal may not be a reversal in trend as it can also be just a minor retracement of the price.

However for a binary trader, it does not matter whether the move is large or not as we just need the price to be 1 pip in our favor and we make a profit.

First of all, let me explain what is a doji candlestick looks like in case some of you here do not know.

The doji is simply a small body with 2 long wick at the top and bottom.

doji3

This candlestick is a sign that the price is going to move back. However it will be even better if this pattern is formed after the price hits a major support or resistance level.

Doji1

Doji2

In my live trading room, you will get to see how I trade using this candlestick at time.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

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How To Trade Binary Using Railway Track Candlestick Pattern

Candlestick patterns serve as a very good tool to trade binary option as it is a good way to interpret the market.

The candlestick pattern is the upfront showcase of the market condition. Therefore a trader can roughly tell whether the price is going to move up or down temporarily simply with the help of several candlestick patterns.

In this post, I am going to share with you one candlestick pattern that is very effective to tell the reversal of the market.

Railway Track Candlestick

The railway track patterns is made up of one long up candle and one almost equal down candle. It forms something like a chopstick or some people will call it a tweezer.

Railway-Track

This formation is formed when a price hits a major resistance or support which causes traders to enter a trade to trade the repulsion.

Once you see this formation, it is a sign of a coming down move. I am not saying that it will be a major reversal, but it will at least be a retracement.

Therefore for us who are trading binary option, this candlestick serves as an alert to tell that the price is going to move down shortly and what you need to do is to wait for your strategy to issue you a trading opportunity to tell you to enter a trade to go LOW

These candlestick pattern serves as an additional confirmation of our trade as it will increase our chance of winning.

I will continue to share with you guys more candlestick patterns that cater for binary option trading only.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

Click Here For My Live Trading Room

 

 

 

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The Importance of Trend Line In Binary Trading

One of the most important tool in trading is the trend line. The trend line is an invisible line of support and resistance that you must plot in order to identify it.

Knowing the position of strong level of trend line can be a plus point in trading. Sometime if you do not know the position of those strong trend line and you enter a trade against the trend line, you do not even know what hits you when the option expires as a losing trade.

Knowing that there is a strong resistance trend line above the price and your strategy tells you to enter a HIGH option, you should consider whether you should enter the trade or not.

Alternatively, you can enter a trade with a lower trade size for trades that are against the trend line.

So let me share with you how to identify strong trend line

  • First of all, you will need to identify swing highs and swing lows as these are the points where you are going to connect to draw a trend line.

Swings

Swing high

  • Next you will try to connect various swing highs and various swing lows together to form your trend line.

trend line 1

trend line 2

  • The trend line you are going to keep are the ones which have more than 3 connecting points.

Once you have identified all the strong trend line, you can then wait for the price to hit those levels.

All you need to wait for is for your strategy to inform you to enter a trade that is in the direction of the repulsion of the trend line.

I am not asking you guys to enter trade whenever the price hits the trend line as this will wipe your account out in no time.

The trend line serves as an additional tool for the strategy you are using as it will improve your overall performance.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

Click Here For My Live Trading Room

 

 

 

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How to trade Binary Using EMA Crossover

The EMA crossover is a good tool for traders to tell the trend of the market. Knowing the trend of the market can be a great help to traders when placing a trade.

So how do you use the EMA crossover to tell the trend

What you can do is to plot a 50 and a 100 exponential moving average on the chart that you trade on.

When the 50 EMA crosses below the 100 EMA, it is telling you that the current trend has now switched to downtrend. What you can do now is to look for opportunity to go LOW.

EMA DOWN CROSS

When the 50 EMA crosses above the 100 EMA, it is telling you that the current trend has now switched to uptrend. What you can do now is to look for opportunity to go HIGH.

EMA UP CROSS

I am not saying that you will enter HIGH trend continuously when you see the 50 EMA crosses above the 100 EMA.

What you should do is to wait for the trading opportunity based on the strategy you are using and then only enter trade that are in the direction of the current trend. It is always better to trend in the direction of the crossover then against it.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

Click Here For My Live Trading Room

 

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How to trade Binary Option Using Breakout of Patterns

In binary trading, it will be great for trader to have the ability to predict the future movement of the price. Once you are able to determine the next movement of the price, you just have to focus on entering trades that are in the direction of the predicted price.

The breakout of candlestick patterns is a great way for traders to predict the movement of the price.

Below are a few candlestick patterns that you can use

  • Symmetrical Triangle

This is a pattern where it forms a symmetrical triangle. Whenever you see the price breaking out of the symmetrical triangle in the same direction as the previous trend, you can be sure that the price is going to continue with the previous trend.

Symmetrical-Triangle1

  • Wedges Formation

This rising wedge is one where you see the price slowly moving up the slope before it breaks downwards. It is also a continuation pattern which you can use.

Rising-Wedges

The above 2 formation are continuation pattern which means that the price will continue to move in the previous trend.

For example, when you see that there is a downward movement before the formation of the symmetrical triangle. When the price breaks downwards of the symmetrical triangle, you will start to look for LOW option opportunity.

When there is an opportunity to go HIGH, it will be best that you enter trade with half the trade size as you are trading against the trend.

Below is the reversal candlestick patterns you can use

  • Head and Shoulder

This head and shoulder pattern is one which you will see the highest point at the middle forming the head while the 2 sides forms lower high which is the shoulder.

When you see the price breaking out of the bottom neckline, it is a sign that the price is going to move down.

Top-head-and-shoulder

  • Double Top/Bottom

The double top is the formation of a M while the double bottom is the formation of a W

IdealDoubleTop
The above 2 are important reversal candlestick patterns that you can use. When the price breaks through the neckline of these 2 patterns, you just have to enter your option in the direction of the breakout.

Understanding the candlestick patterns can be a great help to your binary trading career. So spend sometime to go through your chart now.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

Click Here For My Live Trading Room

 

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How to trade Binary Option Using MACD Divergence

The MACD indicator is another great tool you can consider when trading binary option.

One of the easiest way to use the MACD indicator to trade binary option is the divergence. For the usage, you just need to use the default setting of the MACD indicator provided by your broker.

In case some of you do not know what MACD divergence is, so please let me spend sometime to go through what a divergence looks like.

  • MACD Negative Divergence

Negative-Divergence

When the MACD indicator forms a lower high while the price forms a higher high, it is consider a sign of MACD negative divergence.

A MACD negative divergence is a sign that the price is going to move down soon and therefore as a binary trader, you can start to look for opportunity to go LOW.

  • MACD Positive Divergence

Positive-Divergence

When the MACD indicator forms a higher low while the price forms a lower high, it is consider a sign of MACD positive divergence.

A MACD positive divergence is a sign that the price is going to move up soon and therefore you can start to look for opportunity to go HIGH.

The purpose of this divergence is to help you predict the movement of the price so that you can only enter trades that are in the direction of the predicted movement.

This will greatly improve your winning probability.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

Click Here For My Live Trading Room

 

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