Candlestick Strategy

Candlestick charts can be used to give a visual presentation of the market movements of any asset. It is able to compress a lot of information into an easy to understand and simple symbol. This means that candlesticks are very good for attaining important information quickly. They are both more informative and much easier to read than standard price charts.

Because they are superior both with regards to speed and the amount of information they relay, candlestick charts lets you apply a number of strategies that would not be available when using a conventional price chart.

74 - Candlestick chart

A candlestick shows us an asset’s price movement during a given time period. You can specify this time frame yourself, ranging from just a few seconds and up. A candlestick consists of a wick and a body.

The candlestick’s body shows the closing and opening price of the asset in question during the specified time frame. If the price has increased, the candle will be considered bullish and most commonly be white. If, on the other hand, the closing price is lower than the opening price, the candlestick is termed bearish, and in most cases colored black.

The small extension you can see at either end of the candle is the wick. It indicates the highest price reached during the specified time period.

Please note that candlesticks can also be presented in different colors, such as green or red or shades of grey. In all cases the color will indicate whether the candlestick is bullish or bearish.

How to use a candlestick strategy with binary options

You use candlestick to give you a visual presentation of an asset’s price movements. By compressing a lot of information pertaining to a specified time period into one candlestick, this is a great way to get a lot of information very quickly. Compared to conventional price charts, candlesticks are far more efficient.

A candlestick chart is easy to read, holds a lot of information and lets you follow strategies conventional price charts simply can’t.

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There are a lot of different candlestick formations. You ought to learn what they mean so you can read them and absorb the information they contain quickly. The big candle is a very important example of a single candlestick formation. It is defined by a large body which opens and closes close to the biggest high and lowest low of the relevant timeframe. A white candlestick indicates a bullish direction. A white Big Candle suggests the beginning of a long-lasting upwards market movement. A black big candle indicates that a long bearish movement is imminent.

This is all the information you need in order to make a successful binary options trade. Simply make a prediction based on the movement indicated by the big candle. You need to choose an expiry time for your option that fits with the timescale your price chart has. If you have a short timescale, you might want to go with a 60 second or 30 second option. If your timescale is longer, you can choose longer expiry times. A big candle can be used for High/Low options or Touch options.

Using complex formations for your candlestick strategy

The 3-Method Formation is a well-known complex candlestick formation. 3-Method Formations are based on the Big Candle. But rather than consisting of just one Big Candle, this complex formation is made up of a Big Candle followed by several smaller candlesticks. They fall within the same range as the Big candle, but they are aligned in the opposite direction.

The 3-Method Formation culminates with one more Big Candle. This second Big Candle breaks out of its preceding counterpart. The movement is an indication that the future price movement will come in the same direction as suggested by the Big Candles.

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Once you have attained the ability to interpret a high number of different candlestick formations, you will be able to trade more confidently and more successfully. You can use candlesticks both to avoid losing trades, and to recognize potential money-making opportunities.

Candlestick Strategy
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