If you’ve been looking for a magic bullet to help you trade binary options this it. When I learned about them I felt as if I had found the secret I was looking for, like the wool had been pulled from my eyes. Price action jumped off the screen, I could see support and resistance with only a glance and my other technical tools, which up until then were nothing more than barely understood theories, clicked into place. I’m not here to tell you that using candlesticks is going to make you a millionaire overnight but I will say that a study of them and their principles can boost your overall success.
Candlesticks are the #1 tool for binary traders and I’ll tell you why; they turn trading into a game. That being said, trading is not a game, we’re talking about real money and real risk. What I mean is that candlestick charts animate market action to a level that is very much like a video game. The bulls are one color, the bears are another; their interactions displayed on a chart like a real-time x-ray of price action. Compared to other forms of charts, and in particular those crappy little ones provided by most brokers, there is no comparison. Candlestick charts are the only way to go.
What Is Candlestick Charting
Candlestick charts date back to the days of feudal Japan. In those times rice was like money, more valuable than gold. Rice was traded on the open market and even used as payment for samurai and others. Eventually rice farmers began to sell futures on their crop, that is, they sold next year’s crop at a price decided today. The price of next years crop changed from day to day along with supply/demand and to track this what we now call Candlestick Charting was born.
The feature that makes them so different from all other forms of charts is the 3 dimensional representation. The closest thing to them are O-H-L-C (open, high, low, close) charts which are drawn as skinny lines. The candlesticks expand on that by creating a rectangle around the open and closing prices, with wicks extending out to the high and low of the period.
Many dozens of signals are formed by the candles. Some of them, like harami’s or engulfing patterns, have equivalents in other forms of charting; a harami is basically an “inside day”. The signals all have names that sound like Kung Fu moves; harami, doji, dragonfly, piercing pattern, hanging man, cloud reversal and three black crows to name few. When mastered, these patterns give very powerful short term signals and confirmations for longer term signals.
Candlestick Signals For Binary Options
I’m sure by now it is easy to see just how useful Japanese candlesticks can be. There are many sources of information on the internet but I suggest social traders get a book and learn to read candlestick signals on their own. There are many books on the subject, a few I can recommend are “The Candlestick Course” by Steve Nison and “Candlestick Charting Explained” by Gregory L. Morris. Morris gives a fantastic and in depth introduction to candle charts, signals and application. Nison, the man responsible for bringing this technique to the west, goes beyond the basics and provides an in depth course into the application of candle signals in every day trading.
Like all means of technical analysis the candles are cold, no pun intended. They signals, bullish and bearish, can occur in the market randomly based on day to day, or moment to moment, fluctuations in sentiment. The signals are best used in conjunction with other tools in order to establish trends, support, resistance and the proper perspective for reading each signals. One man’s Harami is another man’s Spinning Top. Investoo.com has dozens of videos teaching candlesticks and candlestick strategies and is a nice compliment to your book learning. Why wait when you could be profiting from these signals right now!