Binary options strategy Pivot and Supporting Candle is another profitable strategy. Trading on it is also quite easy, because there is only a candle pattern in its basis. For simplification, a trader can also use a binary option indicator, which draws pivot levels, for example, the bearing point. This binary option indicator is represented on our graph.
As the candle model, which we use to trade binary options according to this strategy, the Hammer is taken. An ideal hammer consists of a small body and a long spike to one side. If a shadow or a spike looks down, then we face a classic hammer. If the shadow is looking up and the body is looking down, we have a reversed hammer or a shooting star. It is important to emphasize that the ideal figure of a hammer or a shooting star has the shadow only on one side. Closure of this candle should occur at extremes. Under these conditions, the figure has the greatest chance of its detention.
Another important condition for a trend reversal after the forming of a hammer or a shooting star is finding a market at its highs or lows. Only in this case, a hammer or a shooting star really can mean a reversal of the market. As mentioned above, to do this it is possible to build the support and resistance levels independently. To those who have not yet succeeded in this simple process, it is recommended to use an indicator Bearing Point. This indicator alone will build several levels of support and resistance, and will do this for all time scales, and the trader can plan their work not only for the next few minutes, but an hour or more in advance.
The trader can use the strategy Supporting Candle and Pivot on different time scales. However, it is best to choose fifteen minutes or four hours. Thus, for fifteen minutes timeslot daily pivot points will be used, and on the four-hour – weekly ones.
So, in order to trade on a binary option strategy Supporting Candle and Pivot, a trader needs to find a Japanese candle figure of a hammer or a falling candle on the graph. This figure should be located either at the level of support (hammer) or near the resistance line (shooting star). Once the figure is found and meets all the regulations, it is recommended to prepare for the purchase of a binary option. The hammer figure is formed on the bottom of the market. Before its formation a downward movement usually takes place.
Consequently, after the formation of this figure a Call option can be purchased. However, it is recommended to wait until the next candle goes beyond the body of the hammer. Only then can you confidently enter the market.
The same applies to the formation of a shooting star. It is usually formed at the peak of the market. Before its formation an upward movement occurs. Once the model shooting star has finished its formation, it is recommended to prepare for buying a binary option Put. As for the transaction itself, it is desirable to open it only when following a shooting star candle will go beyond the body of the shooting star.
In order this strategy to be more profitable, you can use binary options indicators, such as moving averages. They can be installed on the graph in order to obtain information about the current trend, as well as its change. Thus, a reversal signal will be stronger.
That’s all for now. Got any questions? Just ask the expert!