Gaps when trading binary options for dummies
This is a result of the fact that the price is always striving to handle this situation. Trading the Gap binary option strategy has a small flaw. Closing the gap can occur immediately after it appears in just a few days. This binary options strategy helps to get trading signals directly from the price chart. You do not need to delve into the details of technical analysis or study any indication. They are just not there. On a completely pure chart, you just need to notice the price gap.
It is necessary to wait until the price gap unfolds and then open a trade in the opposite direction from the direction of the gap. On our chart the gap is upward. What should we do in this situation? As can be seen a few candles reversal appears.
Its signal is greatly enhanced due to the fact that the price of a financial instrument will close the price gap.
In this situation, when a reversal of candlestick pattern occurs, you can buy a Put option. Below we are going to look in details at the description, as well as the opportunities to open trades. In the first place, in order to understand the essence of how this strategy works, it is necessary to make decision on such a concept as the gap. It is the price gap on the chart that may sometimes appear.
Most often it is visible either after holidays, or at the time of important events release. This price gap in most cases is clearly visible, but we should remember that it can only be observed on the candlestick or bar charts.
For example, there is some kind of unexpected news or rumor, and the market reacts to it on Monday by the advent of the price gap. The main secret of this strategy is that the market always strives to close the gap. Let's turn to the chart. The gap is quite visible but we have specifically noted it for further clarity. As can be seen, the price has grown up after the gap appearance, but it quickly returned and completely blocked the gap.
This is a result of the fact that the price is always striving to handle this situation. Trading the Gap binary option strategy has a small flaw. Closing the gap can occur immediately after it appears in just a few days. For one, this strategy only works if the market is actually striving to close the gap that has been created.
The strategy works most of the time, but not all of the time, and for this reason, this is not a perfect strategy. Another drawback to this is that most traders do not have a thorough knowledge of candlestick charts, and this is where you will find the price gaps to be the most obvious. When there is a lot of black space between two candlesticks, particularly two candlesticks that show different price momentum one trending up, and the other trending down , this strategy becomes so much more effective.
However, those that are well versed with candlestick charts sometimes find that they are not spending enough time studying current events. These traders have the technical knowledge to trade well with this, but miss out on the important issues that are influencing price over the short term.
A balance is needed in all three analysis categories. Your capital is at risk. Your Capital is at Risk.