Price Action in Binary Options

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This is not a purely mechanical strategy and needs some know-how to be used effectively. There is one indicator only and you need to know how to use resistance and support lines, need to be able to understand candlesticks and recognise trends. This strategy is especially beneficial if you enjoy trading with short expiries of 10 to 20 minutes or so on USD and EUR.

Using a Stochastic Oscillator, the clock and price action, this strategy helps predict when trend retracements might happen. Use the Stochastic on its standard price action strategies binary options of 5, 3, 3 price action strategies binary options mark signal levels at 80 and 20 in order to confirm the signals that show on or near the specific lines. Draw horizontal lines on the charts. These are the resistance and support lineswhich are also called horizontal trend lines.

Try working on higher frames price action strategies binary options time such as 1 hour or 4 hour or even daily if possible as these prove more reliable.

As an experienced trader you know you way around drawing these lines and knowing which ones are significant as well as why some are stronger and some weaker. The stronger price action strategies binary options and support lines are usually those at the higher time-frame.

Where price action is thickest and candle bounces, the lines are often stronger. If you work on two charts at the same time, one on H1 and one on M5 you can see when the price is moving towards one of the stronger resistance or support lines.

Watch the Stochastic and the clock to get a signal when the price is trending and seems to be moving towards a major resistance or support line. The timing of the signals is the most important part of this specific strategy. So you price action strategies binary options to look for a possible retracement when the clock is about to hit the hour or half hour.

This means you could possibly have trade entries 48 times in each day, but the price does not always follow the pattern. This is where the Oscillator comes in handy as it confirms the oversold and overbought levels and also price action strategies binary options potential resistance and support and gives you the actual signal. The signals do not always follow the trend. Trading the retracement should happen when one of the resistance or support lines are reached and there is confirmation from the Oscillator.

You can look at trading the retracement or work on the trend of the entries that occur once the retracement has taken place. This strategy is not recommended for a beginner. There is a very short expiry and patterns are often neglected which could result in a bad trade. A good market entry and relevant expiry is crucial to have a profitable trade and time is only one of the factors.

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I hope that everyone had a wonderful Christmas and a great start to the New Year! While I was away I was reading up extensively on Price Action, in particularly Al Brooks books on price action they finally came in! I am nowhere near done reading them, they are huge books, and not the easiest ones on the shelf to read…..

Sometimes I have to re-read a page to grasp what was said, and I may read all three of these books over again just to let it sink in. They are hard to read, but they are the best source of what price action is to me. I will be applying some of the concepts from those books in my trading, and I will do it as I read the books, so bear with me it may take a while.

So lets have a look at what I did today, this is the first day I started trading since I stopped when the markets were getting a bit crazy and scarce.

One thing I do not do is trade during December; everything just seems sporadic to me so I stay away. Plus it gives me time to focus on family and friends; otherwise my head is stuck in the books lol. Anyways I made four trades today, and three of them were ITM. I have made a slight modification to my charting setup, nothing big really, just I changed and added an extra EMA to the chart. Once it reached it again I waited for some other form of confluence. We can see that the overall trend was down, and there was a bearish inside bar that formed after the candle that reached the EMA.

To help things out further the Value Chart was at the level which also signaled a possible overbought situation. I placed a Put with a 10Min expiry and it was about a 4 pip win. But I did find confluence and adequate PA to trade it. Here price was reacting to the and EMA, so I waited until it came down and touched one of them.

It did and shortly after there was some rejection of that level, and also a pin bar formed, which I highly value. The trend was also changing direction to the north side and the Value Chart had just dipped down below the 94 level, signaling to me a possible oversold situation.

Remember folks, follow your rules. It was ITM by about 4 pips as well. My reasoning for this trade was because price was continuously being rejected around.

I waited for price to come down and reach that level again, and see if it was going to push though. After price reached that level, it had more rejection, in the form of another Pin bar. If you have any questions please ask!