We offer our readers another simple strategy to trade in the financial markets. This strategy of binary options Closing the Gap, like many other we have already published here, refers to the simple strategies. It does not use indicators, and the trading signal here is received solely according to the situation on the graph. Next, we consider in detail its description, as well as the opportunities for opening the transactions.
First of all, in order to understand the operation of this strategy, you must determine such a concept as the gap. This is a price gap on the graph, which may appear from time to time after the weekend or at the time of the important events release. This price gap in most cases is clearly visible, but it must be remembered that it can only be observed on the graphs of Japanese candles or bars.
What is the reason of appearing the gap on the graph? This occurs most often after the weekend. For example, there is some kind of unexpected news or a rumor, and the market reacts to it on Monday with the advent of the price gap. The main secret of this strategy lies in the fact that the market is always striving to close the gap.
Let us take a look at the graph. The gap is there and we specifically additionally noted it for clarity. As can be seen, the price after gap has grown up a little more, but quickly returned and fully bridged the gap. That is, the price is always striving to handle this situation. This binary option strategy Closing the Gap has a small lack. Closing the Gap can occur either immediately after it appears or in a few days.
As seen on the graph, we do not use any indicators to receive trading signals. It’s really a very simple strategy and it does not require any deep knowledge of technical analysis. Everything is very clear and can be seen on the graph.
Getting trading signals for this binary options strategy is simple enough. You do not need to delve into the details of technical analysis or study any indication. This strategy doesn’t have it. On a completely pure graph you need to see the gap, that is, the price gap.
How to open positions when there is a gap on the graph on the strategy Closing the Gap? There is nothing difficult here too! You must wait until after the price gap reverses and then we open the deal to the opposite side of the gap. The gap in the example goes upwards. What should a trader do in this situation? As can be seen, after a few candles a reversal one appears. Its signal is greatly enhanced due to the fact that the price of a financial instrument will close the price gap.
In this situation, when a candle pattern reversal occurs, you can buy a Put option. The same applies to situations where the price gap comes downwards. It is desirable to wait for the appearance of a candle on the graph, which would indicate that the market is ready to reverse upwards and it is time to buy a Call option. As can be seen, there are no other difficulties in this strategy. Reversal patterns of Japanese candles are studied at the initial stage of trade.
Thus, the binary option strategy Closing the Gap is a simple way to make a profit in the financial markets. However, it must be remembered that the signal to the opening of the position is not the appearance of a gap, but the reversal of the market in the future. In this case, the signal is many times increased.
That’s all for now. Got any questions? Just ask the expert!