Binary options pinbar strategy
Look at this chart. The red horizontal line is our resistance. In the first blue box as you can easily see we have a pin bar. This is a potential put. Small body, big wick. We have a reversal and now notice the pin bars near the chinkou the green line of Ichimoku Kinko Hyo. As I said in my article about Ichimoku the chinkou can act as a support or a resistance. When the price hit the chinkou and we have pin bars there are potentials calls.
I can see two ITM calls here. Now, look at the second blue box. Others who prefer the Japanese candles will have to look for a model that consists of a single candle. Closure of the bar, which is located on the left, should be in the opening part of the middle bar, hence the middle bar must close near the opening of the right bar.
At the same time, middle bar must have a sufficiently long shadow, which greatly extends beyond the left and right bars. Before you begin to understand the use of the strategy, it is necessary to understand what a pin-bar, which is located in the middle is and how it should look. First of all, it should be noted that pin bars have such a property as a long shadow. Sometimes in trading literature, this shadow can be called a spike.
Thus, they are directed in the opposite direction from the current movement. It is important to note that the longer the spike, the greater the chance that strategy works out is. The ideal variant is when the spike goes far beyond the previous bar or candle, and the body does not go beyond it. There is another important point.
Watch for one of the bullish pinbars to appear and once it does, have your pivot point calculator draw three support and three resistance levels jointly with its daily pivot and then look to see if the pinbar is at a level of support. Nevertheless, if you use the stochastic too and observe the lines crossing and indicating an oversold situation, that action will be additional validation. Again, keep in mind that the pinbar on its own is not enough to provide solid validation for trade entry, but when paired with additional indicators, it can provide a clear view of the expected upcoming price movement.
For the beginner level trader, this binary options strategy may seem a bit complex, but with just a bit of practice in a demo platform, if possible it should become quite easy to use. Your Capital is at Risk. Short Term or Long Term. Pinbar Strategy Trades Filed Under: The financial services provided by this website carries a high level of risk and can result in the loss of all your funds.