Binary Options Strategy “model Dodge” is a fairly simple candle model that is easy to find on the graph. It should be noted that this strategy can be used not only by professional traders, but also by beginners. Moreover, this strategy does not even need to use indicators of binary options. You can make a profit by using this simple model.
Graphic model Dodge is formed on the market very often. It consists of a single Japanese candle. The body of the candle should be of the minimum size i.e. the range of opening and closing the candle is virtually equals zero. There must be a large candle shade. That is, in the framework of the trading period, in which this candle was formed, the price and the range of extrema are large enough. Finally, before the candle patterns there should have been a strong movement to one side, upward or downward trend in the market.
Next, we will have a detailed look at this candle model and those trading signals that it gives. As already has been mentioned above, the candle model Dodge and its work out must meet several conditions. One of them is previous trend. Using this analysis system one can predict the future market movement. In other words, a trader can predict what will happen in the market in the nearest future, make the right choice and make a profit as a result.
If the market forms a candle combination of Dodge, then in the nearest future a reversal is possible. Thus, the formation of a pattern must occur at the height of the market, or at its bottom. Formation of the model in the middle can lead to the continuation of the current trend. How to determine whether the market is at the extrema o the price level has not reached its peak? It is easy to determine with the help of support and resistance lines. Need to find a few minima and maxima and hold appropriate levels on them. Then we can find out where the price at the moment is.
As for the model of Dodge, one must use it as a trading signal very carefully. To buy one or another binary option it is advisable to wait for confirmation. This may be proved by the following candle that closes above or below the extremum of Dodge. For example, if the market before the appearance of the Dodge was a downward trend, the formation of the model runs at the level of support, the trader is recommended to prepare for the purchase of the Call option. However, in order that the signal was stronger, it is desirable to wait until the next candle would go beyond the upper shadow of Dodge. Once this happens, you can buy a Call option.
The same can be said about the situation when the price until the appearance of the model “Dodge” is in an upward motion. At a time when the figure of Japanese candles “Dodge” is formed on the graph, the trader is recommended to prepare for the purchase of a Put option. To be sure as for the signal it is desirable to wait until the next candle breaks the minimum of Dodge. That’s when you can buy a Put option.
There are also some recommendations on how to use binary options strategy “Dodge”. For example, it is desirable to choose the end of the trading day as the expiration date, as in the earlier timescales the market noise that can lead to the fact that the trader will incur a loss is possible.
That’s all for now. Got any questions? Just ask the expert!