Strategies on the patterns for binary options: “PINOCCHIO”
The most frequent signal, which occurs on the price chart, is a pin bar. This signal refers to the candlestick patterns and is a Price action chart pattern.
Price action is a whole philosophy of trading on clean charts using the price itself as an indicator and all the patterns drawn by the quotes of the financial asset.
Thus, the pin bar pattern is the pin which pierces the firmament or dungeon space of the quotes charts in order to help the price push and continue its movement.
Those who have mastered the skill of reading the signs provided by the price are a kind of market experts, reading between the lines of the quotes and knowing everything that will happen to the price in the near future.
Pin bar is a price bar with a small body and two shadows – one small and one long. The “long nose” of the pin bar stands out from all the other candles and the more it stands out from the other bars, the stronger the signal. The professional slang calls such pin bar “Pinocchio” – you have probably guessed why.
Pin bar is classified as a reversal bar of the price. After the closing of the pin bar candle, in 87% of cases, the price movement in the opposite direction is observed. The nose of “Pinocchio” is always facing in the opposite direction of the upcoming movement. That is, as described above, the price quotes thereby repulse and go in the opposite direction.
Thus, if the pin bar nose is up, the price will start to move down. If the nose of “Pinocchio” is down, the price will go up.
However, at the presence of any of the following conditions, the pin bar is not taken into account:
- long nose is absent;
- nose of “Pinocchio” stands out from the other candles slightly;
- candle shadows have equal or nearly equal length.
- the pattern emerged at the level of support or resistance.
- the pattern confirms the information of the technical indicator about overbought/oversold condition of the financial asset.
In the above situations, the pattern’s signal strength is almost 100%.
How to use the pin bar pattern in binary options trading?
Pin bar chart pattern can be a very good place to enter the deal with the binary option. So, after the closing of the “Pinocchio” candle, you need to make a deal with a classic option towards the expected movement of the price.
In addition, given the fact that after a pin bar emergence the price reverses, you can make a deal with the “Range” or “One-Touch” option after the closing of the “Pinocchio” candle – their condition to get profit is to achieve a strike level.
Thus, to trade under the “pin bar” pattern, we need to choose the classic binary options, RANGE and ONE-TOUCH options, which can help you make a profit when moving in the same direction.
If you used the H1 chart to identify the “Pinocchio” pattern, the contract expiration time should be chosen of at least 6 hours. However, if you’re staying on the H4 timeframe, the expiration time is not less than 23 hours.
Trading under the pattern has at all times brought a good enough profit. It is no wonder that the traders who learned to trade on a clean chart are brought to the category of the “market guru”. Percentage of working off the signals is about 70%. Thus, 4 and 5 deals will be closed at a profit, which is very profitable with options, the percentage of payouts on which are 150%-300%, and which we recommend using in given trading.
Forget the saying about the noble risk and set the size of the deal not more than 5% of the size of the deposit. In this case, it is better to drink champagne after successful trading somewhere under the sun lounger on a tropical island, than to risk in trading and drink champagne with grief.
|Strategies rating||Brokers rating|