How To Setup Reversal Strategy Based on Candlestics
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Please setup chart on candlesticks!
Setup candlestics chart on 5 or 10 seconds, depend how will be better for you!
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Binary Options Reversal trading
Trading requires a good strategy, there are hundreds of them with different market actions, indicators, charts, and price guidelines, but trading against the trend or waiting for the signs that a trend reversal is going to start is one of the most profitable trading strategies.
What is Binary Options Reversal Trading?
This is a strategy, in which the trader enters the market when a price trend is going to experiment a reversal. The current asset price movement is going to change its direction and take the opposite one. This means to trade against the trend. These reverse points are considered one of the best entry points for traders to maximize revenue. It is based on the economic premise that over time, the market regulates itself and price will return to its normal or average condition. This autoregulation feature can be anticipated thanks to well-identified patterns each time a price reach its peak.
Understanding Binary Options Reversal Trading
Reversal is the change in the asset price movement direction after a price trend. It can be positive or negative. (Increasing or decreasing its price).
Trend is the direction in which a price has been consistently moving. It can be increasing or decreasing
a) Uptrend is a continued price increasing or upward tendency. A tendency to higher highs and higher lows
b) Downtrend is a continued price decrease or downward tendency with lower highs and lower lows
Peak is the maximum or minimum price and asset can reach before the market autoregulates and it experiments a pullback
Pullback is a falling back of an asset price from its peak. This can be considered a reversal, however, some other indicator is needed to confirm it.
Investment strategy the investment plan any trader follows.
Reversal Buying or selling sign
a)Reversal trading sign for selling is when an upward trend changes its direction. This means that once the increasing price reaches its peak, this will fall. A trader needs to be aware of this and sell either before it reaches its peaks or just after it to maximize his profits. For binary options, this is the best time to buy a call.
b)Reversal trading sign for buying is when a downtrend changes its direction. This means that once the decreasing price reaches its lowest peak, this will rise. A trader needs to pay close attention to this sign and be ready to buy the asset as soon as he confirms this and increases his net revenue. This is the best time to buy a put.
Reversal indicators are analytical tools, which signal the point at which a trend will experiment a reversal.
Binary Options Reversal Trading can be very challenging. However, several patterns can be used to identify properly the reversal signs and take advantage of them for bigger profits and increases trader net revenue. Knowing when to buy a call or a put will depend on these reversal signs.
Best Binary Options Reversal Trading Strategies:
Candlestick charts and candlestick pattern for reversal
Using the candlestick over a price chart is easy to identify the reversal patterns. There are a bullish reversal and a bearish reversal. If you do not know the basic for candlestick chart please read the dedicated article for it in this web page. Click HERE to see candlestics formation article.
The bullish reversal patterns are clear indications to buy a PUT because asset price will increase:
1. Bullish abandoned baby
2. Morning star
4. Invented Hammer
5. Bullish engulfed
6. Bullish Harami
The bearish reversal patterns are clear indications to buy a CALL because asset price will decrease.
1. Evening star
2. Shooting star
3. Dark cloud cover
4. Bearish Harami
5. Bearish engulfed
6. Bearish abandoned baby
Learning to recognize the most common candlestick pattern is useful. Particular attention should be pay to the open or closed candlestick to avoid confused signals and do the correct market action.
Fractals are excellent indicators to find a recurring pattern, which anticipate the price movement before a trend reversal. Fractals used a candlestick chart to identify the reversal signs or reversal patterns if you want to learn more about fractals you can read our article about it HERE
Bearish turning point pattern a sign for buying a CALL
This pattern is identified, when there is a formation with a highest in the middle and the two lowest high on each side of it on a candlestick chart and its meaning is that price will fall.
Bullish turning point pattern a sign for buying a PUT
This pattern is identified, when there is a formation with when there is a formation with the lower low in the middle and two highest low on each side of it on a candlestick chart and its meaning is that price will rise.
Parabolic Stop and Reverse (Parabolic SAR)
Parabolic SAR is a momentum indicator for price direction. It identifies the time when this momentum has the highest probability to experiment a trend reverse or switch its moving direction. if you want to learn more about Parabolic SAR you can read our article about it HERE
Sign to buy a PUT
Each time the dotted line drawn by the parabolic SAR is below the candlestick bar, the prices are going to reverse and increase
Sign to buy a CALL
Each time the dotted line drawn by the parabolic SAR is above the candlestick bar, the prices are going to reverse and decrease.
Reversal Trading 60 seconds Binary Options Indicator based only on candlestics formation
To trade with this strategy you must have IQ Option account. If you still dont have IQ Option account, you can click HERE to register.
Our strategy bassis on only candlestics formation, so basicly we dont need any aditional indicator. Please setup candlestics formations on 5 seconds (can be 10 seconds too, depend how its better for you).
The best money management for reversal trading is investing in one trade as much as right predictions you have. For example is you are sure in 99 % the price will change than you can invest 30 % of your balance. But If you are not sure and candlestics was formed as bearish or bullish than you can invest 1 or 3%.
With this money management you investing much on options that you are shure you will win. And not investing much on options that you are not 100% procent shore if price will reversal. Dont use Martingale for this strategy!
When candlestics are formed in one of bullish formations we invest in PUT. Example:
When candlestics are formed in one of Bearish formations that means we should invest CALL.
Please read an article about candlestics formations HERE
“Your capital may be at risk. This material is not investment advice.”
REVERSAL 60 SECONDS TRADING BINARY OPTIONS INDICATOR – Trading Pattern
Full video explanation how to setup chart and how to trade by using reversal trading.