Trading Binary Options With Tweezer Candle Pattern
Cannot be denied, the analysis pattern candle is one of the effective methods of trading and many popular trader. In addition because it is simple, pattern candle is also beneficial in providing signal further price movement. If previously we have discussed the use of the pattern inside the bar and pin bar, so this time we will learn about how to utilize the pattern tweezer for trading binary options.
What's a tweezer? And how its shape? Basically, tweezer is a reversal pattern consisting of 2 candle. This formation is divided into a top and bottom tweezer tweezer. As a bearish reversal, tweezer top has characteristics:
Appears when the uptrend in the point of high prices.
First candle tweezer top large and usually follow the previous trend, so be bullish candle.
The second candle appears as a bearish candle
Candle first and second have level high (the highest) in the same
Meanwhile, tweezer bottom which signals a bullish reversal has the following characteristics:
Generally appear when the low point price in downtrend
First candle is a large bearish candle
The second candle is formed as a bullish candle
First candle and both have low level (the lowest) in the same
Tweezer pattern considered indicates a strong momentum of turnover, so reliable in the strategy reversal. This is reflected in the difference of the two tweezer formation that forms the candle: Candle the first large-bodied is a picture of a strong price movement of the previous trend, whereas the second candle first candle, in contrast to shows that the trend began to cease, and there is a possibility would turn around.
Application Pattern Of Tweezer To Trading Binary Options
Then, how to implement the pattern of tweezer in the binary options? Simply put, we can just use pattern candle tweezer by way of trading reversal in General. For example, you identify formations tweezer bottom in the trend decline in the EUR/USD. In accordance with that pattern reversal bullish signals, you can prepare to open the option "call". Conversely, when there is a pattern of tweezer top on top of the uptrend, then chances are most potential for you is to set the option "put".
However, trading binary options is not only a question of "call" and "put" only. As an alternative, you can also make use of the option for the type of tweezer pattern, such as "touch" and "no touch". How its application? To obtain a clearer picture, try to find out the explanation of how trading binary options for each of the tweezer formation below:
On the graph below, the trend of the EUR/AUD change from uptrend became downtrend after tweezer top pattern formed. Option "put" opened at the open level of bearish candle, formed following the second candle in tweezer top pattern. After getting the opportunity entry, then the next you live to plan the exit position. Because in binary options closing position cannot be done manually, only through the expiry time, then You need to be more careful in estimating the duration of the price drop. No need to worry, you can adjust the expiry time with trading time frame used. For example, when You trade with timeframe H4 chart like the example below, the expiry time can be determined between 6 to 12 hours.
In the meantime, you can also get the zone of "touch" and "no touch" potential of tweezer top pattern. First of all, a high level of mark pattern tweezer top with horizontal lines (in image appears as a white line). Then, set the area 40 pips above the white line as the zone of "no touch". As for the option "touch", the zone can be determined 40 pips below the line. Then what about the expiry of his time? For the position of "no touch", the range of the specified expiry less lebiih the same as trading "put" above. But for the option "touch", the expiry period should be extended 12 to 48 hours.
Inversely proportional to the formation of the tweezer top, tweezer bottom could be interpreted as a signal of "call" in binary options. However, this pattern also has similarities with tweezer top, where we can use it to touch trading. For an overview of more details, try to look at the chart below:
It can be seen that the placement option "call" can be adjusted on the level open bullish Candle formed following the second candle in Tweezer bottom pattern. In the meantime, You can also put a horizontal line in the low level of the tweezer bottom pattern, to obtain area "touch" and "no touch". In the above example, the zone of "no touch" can be placed 30 pips below the horizontal line, whereas if you open option "touch", the best recommendation to define the zones that can be "touched" is 40 pips above the line.
The selection of the expiry time for the strategy of using a tweezer bottom pattern is not much different with advice on formations tweezer top. The key, preferred time frame as a leading reference in determining the expiry time.
Trading Tips With A Tweezer
Because it can be used to open the option "call" or "put" regular and touch trading, maybe now you're wondering, this type of trading which is best to use? Actually, there is no definitive answer about it. The best option types can be dependent on market conditions or your trading style. Like for example, the option "touch" and "no touch" more appropriate use when market volatility were high, so if you prefer trading in the market, maybe you would be better suited with a trading high/low using only the option "call" and "put".
Regardless of the type of option is used, the most important aspect of this strategy is actually recognize patterns tweezer itself. Why is this so? There is not much different from other strategies that use certain candle patterns, there is a risk of fake signal if you're not careful in identifying patterns of tweezer. Often a newbie do mistake by hastily took the step when looking at the pattern of the candle is being formed, but there hasn't been another signal that confirms the formation. It would certainly be very influential for the success of Your Binary Options trading.
Let's say you already open the option "call" because seeing the pattern candle tweezer bottom formed. But as it turns out, the price is thus continued its bearish trend, and be the options expire out-of-the-money. Then how do you anticipate the unwanted stuff? There are some steps that can be applied to obtain the confirmation of the candle patterns, such as:
Really implement recommendations open "call" or "put" on the third candle after the formation of the tweezer formed. This is the method that has been suggested above. Actually, you can just open the option at level close (closing) the second candle. But this way is less recommended because the reversal yet unconfirmed. So when you identify a chart on the existence of a pattern of tweezer top which is a bearish reversal signal, you can wait until the next candle again formed. If the candle is bearish, then this could be a signal that strengthen Your trading opportunities to open option "put".
Using the help of level-level support and resistance. The formation of the formation of the candle in the important support and resistance can also be an cogent entry signals. In this case, you can observe the patterns tweezer top in the area of resistance, and the formation of the tweezer bottom zone support.
Pay attention to the signals overbought and oversold indicators of the oscillator. You can also combine the analysis pattern candle with indicators, particularly the oscillator signal that indicates the overbought and oversold price. Overbought and oversold equally indicate the level of saturation that is also often used as signals reversal. Therefore, if the top formed tweezer coincide with the oscillator moving in overbought level, you can make it a signal is confirmed to take the option "put". As well as contrary to tweezer bottom, you can observe it in conjunction with the signal from the oscillator oversold.
Putting into practice the strategy of tweezer in the demo account. For those of you new to trading strategies using a tweezer candle patterns and want to try, it's good to apply it first on the demo account. However, any strategy always contains risks. But unfortunately, there's not much that implements binary brokers demo account is not paid. To find out where can demo trading binary options for free, you can visit this article: list of Binary Options Broker that provides a free Demo Account.