Market movements - is a whole unknown world, especially for the girl-trader. Do you think that the work on the market exclusively for men? You fundamentally wrong, gentlemen. Specially for you, I am writing this article on the basic of the most profitable patterns and formations in the trade, which have been tested by me when working with both binary options and many other instruments and markets. After reading you will have no doubt that trading in the plus everyone can. Let's get started.
To begin with let's deal with the terminology to clearly understand what is the pattern. Here you have the following definition, market pattern - Is a kind of repetitive patterns on the chart, which allows you to determine the most likely future movement of the market. These models have a classic technical analysis, in the form of figures, and there are candlestick patterns in addition to them.
Why generated data model? The answer is very simple. Large buyers and sellers in the market behave uniformly and some templates. Knowledge and understanding of the market structure and movement patterns will give you a great advantage in options trading before most other traders. Now you will see for yourself, and we'll start with the classic patterns of technical analysis.
Technical figures and patterns
Pattern №1. Triangle, as the basis for a new movement
The most common and simple pattern - a triangle. How it looks on the graph? Here is an example of a pattern for the purchase option CALL.
And here you can see the situation to buy PUT.
As you can see, everything is easy and obvious, after the breakdown of the boundaries of the triangle there is a certain momentum in one direction or another. The movement may be long, and maybe short, but to us it does not matter. We buy the option at the moment of the break, which gives us a high probability of success in the transaction. Apply a figure can be at any time intervals depending on the time of expiry (expiration) you select options.
What is the logic of why the chart pattern shows? Triangle - is the time of the struggle between buyers and sellers on the market, on the one hand and keep the price draw in buyers, on the other sellers. Breakdown border tells us about winning some of them, and as a consequence of the impending move.
Many sources like complicate this model by allocating additional pieces, such as ascending or descending wedge, symmetrical or asymmetrical triangle, pennants and more. I think that we are all with you for a long time yet studied geometry at school and understand the look of shapes, form logic is also clear. Therefore, the principle is simple:
• commit the transaction.
Understand this wedge or triangle of the original does not make sense, they work the same way.
What should be noted yet? If you know what the trend is, and how it differs from the consolidation, most of the figures just refers to the last. It is advisable to take into account this aspect, and shopping options on the signals in the direction of the main trend, it will increase the percentage of winning trades. As a rule, the triangle is considered a continuation trend, but it does happen and turns with it, so watch out for the breakdown and do not rush to buy.
Pattern №2. Double top, double bottom
It is also a very famous model, which is a reversal of the current trend. Here is an example of a pattern on the chart for the purchase of options CALL.
And in this graph buying PUT.
Logics? This figure is explained by analogy with the triangle, on the one hand the price keeps buyers, sellers, on the other, and then the moment of truth.
In addition, please note that it is extremely rare and triple tops, which work just as well. The figure is considered a reversal, for confirmation of entry is a breakdown of the border in the direction of the new trend, so do not hurry, it is better to buy an option just after the break.
Pattern №3. Head and shoulders or classic of the genre
Almost everyone who trades in one way or another heard about the reversal of the formation of "head and shoulders". Some people believe that it works, others are not. However, to deny that it is repeated and makes it possible to determine the probability of a movement, it is impossible. What we see on the chart?
An example of an option purchase CALL.
Another example for options PUT.
As can be noted, for the confirmation of this figure is not enough breakdown. After patterning almost always have to roll back to the border, even its breakdown in the opposite direction. It is necessary to wait for the end of the rollback and re-sample the line between the "shoulders" and "head".
The combination of a great variety of candlesticks, we are with you look at only the most important of them are:
Pretty common pattern in the chart that looks like this.
As can be noted, the pattern indicates uncertainty in the market, some balance of forces. After the red bearish candle, we can talk about the temporary victory of sellers, so enter the market with them.
2. The hammer and inverted hammer
This pattern indicates a sharp redemption by the customer, or on the contrary of the sharp sales. Take a look at the chart.
It should be noted that it is important to pay attention to the color and the closing price of the candle, and not only on the form itself. If the candle body is also at the top, but the closing price is lower, and the color red, then it is no longer a signal to buy. In addition, the longer the shadow of the hammer, the stronger the signal.
The model suggests the rapid change of sentiment in favor of buying or selling. Such sudden jumps in the market talking about moving in their direction. On the chart we see the following.
4. Evening and the Morning Star
Reversal pattern, indicating the change of the trend or the end of the correction. It reflects gradually increasing dominance of buyers or sellers. Here is an example.
To sum up
Not bad, is not it? As a result, we have patterns that are being repeated patterns on the chart, it has become a useful tool for trading binary options in particular. Using them is not too difficult. Successful transactions to you, friends!