I’m sure you have heard it from many people. But in fact the major part of these talks do not have any ground as those “gurus” don’t understand themselves what this phrase means and cannot explain it to their listeners at all.

Though it is really possible! Now be ready to receive a piece of information how to take advantage of a trend and how you can identify it in proper way. Also, you are to understand that you shouldn’t choose a single tool or indicator as a base for your trades. But the first thing we should do is to understand the way to identify the trend.

The Higher Highs and Higher Lows are the terms of an uptrend. It is not so difficult to remember. The price is tending to move up and each peak will be higher comparing to the previous one.

A downtrend can be characterized by so called Lower Lows and Lower Highs. It means that each following peak is lower comparing to the previous one. As you can guess it is opposite to the uptrend. The next step is to learn drawing trend lines, as it can become a rather useful tool for analysis. Trend lines: If drawing a trend line in a downtrend, you need to make a line connecting two or more low points.

If drawing a trend line in an uptrend, you need to create a line connecting two or more high points. Pay attention: uptrends mean connection of Lows and downtrends mean connection of Highs. The more points we have used the more valid the line is. Now you are able to estimate an overall direction of a chosen asset and you are ready to trade. Pinocchio or Pin bar can be considered as a useful tool for active traders.

Everything is easy and earning money is not difficult if understanding the Trend, which is considered to be the best friend, and with Pinocchio. Japanese candlestick is very easy to identify, so we have an opportunity to trade any formation of this kind which came the closest to the first two Lows. This way, they avoid making bad trading decisions, which keeps them safe from losing a considerable amount of money. These can be seen as the support and resistance level.

In this situation, if the price of the shares goes towards the resistance level, you should place a put option. But if it falls, place a call option. If you correctly want to draw a support and resistance line, you must follow the below-mentioned steps. First thing first, you need a chart. It would be beneficial if you picked a chart that you are familiar with.

Once you have a familiar chart by your side, you can then identify its highs and lows. So, you should analyze the price movement of assets and then draw the line at every highs and lows. This way, you will get a clear understanding of whether or not the market is trending.

After analyzing the chart and the market, identify the highs and lows and draw a line between them. Once the process is completed, you can quickly identify support and resistance. One thing to consider is that the horizontal line will not lie at every high and low. This way of drawing highs and lows works perfectly on different time frames. Just as drawing support and resistance is easy, identifying it is also easy.

You can follow a few steps to identify support and resistance. One of the easiest ways to identify support and resistance is via historical data. Analyzing historical data is possible by learning about the past pattern. Because binary options is a volatile market and bigger financial news can instantly change the market condition.

So, you must not entirely depend on it to identify the support and resistance levels. You can also consider the past support and resistance level and historical data to identify the profitable support and resistance. Using this information, you can make an ideal market entering and exit strategy. Besides historical data, technical indicators can also help you identify support and resistance levels in a trading chart.

Commonly used indicators are Pivot Points, Moving Averages, and Fibonacci tools. The last way of identifying support and resistance levels is by following the general rule that says drawing a straight line from the bearish reversal point. The following support and resistance trading strategies can help you win a considerable payout while trading binary options. Here are a few best support and resistance trading strategies.

Range trading strategy is commonly used in binary options trading. In this strategy, space is created between support and resistance. The space is only created when the traders sell resistance-level assets but purchase them at the support level.

When this happens, the support level acts as a floor , and the resistance level becomes the ceiling. You need to remember while using this strategy, support and resistance are not always straight lines.

It happens because, at certain times, the price bounces off an area rather than forming a line. While trading in a range-bound market, traders search for long entries when the price bounces off support. But they look for short entries if the price bounces off resistance. While range trading is an excellent strategy, you might want to place a stop loss. After the range strategy comes the breakout strategy. Once there is a breakout, this strategy requires traders to wait till the price trends again.

You can find breakouts above the resistance level and below the support level. Also, if the price of an asset moves powerfully in a direction, it indicates the emergence of a new trend. The next one is the trendline strategy. Here, you can use the trendline either as support or resistance. This is where chart patterns , signals services , candlesticks and technical indicators will come in.

A simple tool like the pivot point calculator can be used as part of a TOUCH trade strategy with very effective results. Using tools like these will take us to the next part of choosing a strategy, which is how to understand and set expiry times. Expiry times are very important to binary options, because all trades in this market have time limits. However, not all binary options trades require time limits to be successful.

If a trader bets on a TOUCH outcome and the asset touches the strike price well before expiry, the trade outcome is already known and the trade is terminated as a profitable one. Now when you identify and separate trades that are not so dependent on expiries from those that are, you can better understand what kind of strategy you would be looking at. The binary options market combines assets from different asset classes into one market.

These assets do not behave alike. Some assets are very volatile with large intraday movements. A very clear example is gold. Some binary options assets are not traded round the clock but only at specific times e. the stock indices. The factors that may trigger a massive move in a stock index would obviously not be the same for a commodity or a currency. Even within the same asset class, no two instruments are exactly the same or behave alike. An understanding of asset behaviour is therefore key to being able to develop a trading strategy for the market.

It is up to the trader to study the behaviour of assets, understand the technical and fundamental indicators that will influence the behaviour and price movement of that asset, and then create a trading strategy that will work for that asset.

In this section, we will demonstrate the application of all the parameters we have mentioned above using a simple but effective trade strategy. We do this using our understanding that the effect we want to trade on the hourly chart, will happen in an hour.

So we will use the EURUSD. The strategy has been used to create a colour-coded indicator, which shows a green arrow on bullish signals and a red arrow for bearish signals. Using this signal, the trade was executed on the binary options platform. The price of the asset EURUSD fell in one hour from the time the signal was generated to the expiry, producing a trade result in our favour. Brokers are filtered based on your location New Zealand.

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Trend channels are a highly useful technical analysis and trading tool. Trend channels are easy to draw and provide trade ideas and entry signals, with the proper strategy. A trend channel is two lines that run along the price highs and price lows of a trend. Typically these lines should run pretty close to parallel of each other. If lines are converging on each other this is likely a wedge pattern, and if the lines are moving away from each other, this could be a broadening wedge.

These are different patterns altogether, so ideally we want the trendlines running pretty much parallel to each other. Figure 1 shows a trend channel in General Electric NYSE:GE stock. The lines are pretty close to parallel with each other, and the lines are touching nearly all the major price peaks and troughs. A trend channel is a guideline, therefore, I prefer it to run along multiple high and low points, instead of running along only the extreme high and low points.

Rather, the price may move just above or below it before reversing course and heading back to toward to the other side of the trend channel.

Trading trend channels, when you find them, involves a surprising simple strategy. The first step is to find a trending asset. Then focus on assets which are moving in a relatively rhythmic way, such as General Electric in figure 1. Once the trendline are drawn the price seems to gravitate toward these lines; moving into the vicinity of the line and then reversing course.

Most traders make an error in that they jump into trades too soon. They assume the price will stay within the trend channel, but as figure 1 showed often the price will overshoot the trend channel resulting in a loss or a poorly timed trade. The following trend channel trading strategy takes care of these two issues.

The rules for trend channel trading are simple. The simplest trades are when the price comes very close to one of the trendlines, or the price moves through it. When either of these scenarios occurs, as soon as you see one bar moving in the opposite direction back toward the opposite side of the trend channel , take a position. For example, if the price is dropping and comes very close to the lower trend line wait for the price to start moving higher toward the upper trend channel line.

When it does, take a long position buy call. Same for if the price pierces one of the lines. For example, if the price rallies slightly above the upper trendline, watch for the same reversal pattern. You want to see the price reverse, for at least one bar, and when it does you take a short position buy put. Figure 2. Trend Channel Trading Examples — General Electric Daily Chart. In this case, the trendline at the time of the bar was intersecting at That means the price must reach at least The price reached By only taking the trades that reach close to the trendlines, touch the trendlines or slightly penetrate the trendlines we avoid much of the whip-saw like movement that occurs toward the middle the channel.

If trading binary options your exit is straight forward: exit two to three bars after your entry. Figure 4 shows an example of this, as well as where to place a stop loss. A stop loss should be placed below the recent swing low for long trades, and above the recent swing high for short trades. If the trend channel is up, ideally focus on long trades which will position you in alignment with the uptrend. If the trend is down, ideally focus on short trades which will position you in alignment with the downtrend.

Trend Channel A trend channel is two lines that run along the price highs and price lows of a trend. Figure 1. Trend Channel — General Electric Daily Chart Drawing a Trend Channel A trend channel is a guideline, therefore, I prefer it to run along multiple high and low points, instead of running along only the extreme high and low points.

Trend Channels Trading Trading trend channels, when you find them, involves a surprising simple strategy. Trend Channel Trading Strategy The rules for trend channel trading are simple.

Figure 2 shows a zoomed in shot with a couple examples in General Electric stock. Figure 3. Exiting If trading binary options your exit is straight forward: exit two to three bars after your entry. Figure 4. Trend Channel Trading Exit Point Final Word If the trend channel is up, ideally focus on long trades which will position you in alignment with the uptrend.

Now when you identify and separate trades that are not so dependent on expiries from those that are, you can better understand what kind of strategy you would be looking at. A technical analysis indicator is, most often, a mathematical formula which converts price action into an easy to read visual format. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow. The two lines show higher and lower prices of an asset in the market. If you are not allowed to use it leave this website.

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