What are the most important things you should consider before taking CALL or PUT in Binary options?

7 most important things you should consider before taking CALL or PUT in Binary options.

 1.Trend

Understand what is the overall trend by analyzing major and minor trends. Example: If the price of an asset or currency is going up in the past 30 mins or 1 Hour with retracements, then the major trend is to be considered as a UP trend. The most recent direction such as the last 5 mins or 10 mins is eventually your minor trend.

You need not see for 4 hours or 5 hours to consider this if you are going to take the trade with a few mins expiry such as 1,2,3,4,5 mins. In case you are going to take trade for the whole day, then maybe you require to take analyze at least a week's chart before placing your trade.

Detailed video for you on how to observe trends in Binary options trading.

2. Support and Resistance💪

Support and resistance are misunderstood mostly as horizontal lines but it is not exactly horizontal lines. It is horizontal plus the trend lines that you draw on the chart. support and resistance are present at all the places in a price chart. The only difference is the strongest support area makes the price go up and the strongest resistance area makes the price go down. We should understand that support and resistance are the areas where buyers and strong sellers sit respectively.  If you see it this way buyers and sellers basically sit in every part of the chart.  As a trader, we are supposed to pick the right support and resistance area their strong sellers and strong buyers set to understand that way strong sellers are and were found by us are we have to see the price movement which tells us from which area exactly the price has reacted the most or the price has a reversed.

This way we can find strong support and resistance areas in the chart and if we refer to history movements (a couple of hours history) of the chart we should be easily able to define which are strong areas and which are the weak areas of support and assistance. With our major-minor trend analysis in place and our right support and resistance marked, now we know that whether the trend is going to continue or the trend is going to reverse.

 But this is not it, check out the rest of the 5 points to understand this better.

3.Wicks of the candles👍

By now you should have understood a brief idea about how to mark strong resistance and support points and how to analyze the major and minor trend but this will not be sufficient in binary options and binary options you have to also observe the most recent entry of buyers and sellers which can be done by seeing the weeks and the candles forming at the support and resistance areas.  Candle wicks are very important and have to be observed concerning the strong support and resistance area logically when you see a strong wick forming from a support area and you saw a candle finishing above that support area this clearly states that its abayas entry and annexed utensils your going to see a strong momentum of buyers and vice versa for sellers.

 Not all the wicks of the candles will help you understand the buyer's and seller's entry. Some of the wicks might be a retracement but when you match the wicks forming at strong support and resistance area you can take it as a confirmation of buyers and sellers entry respectively.

 Taking the wicks into consideration, the strong support and strong resistance levels marked and the major trend will give you a very good idea in which direction the price is about to go.

4. Higher high - higher lows or lower lows and lower highs

When you see price touching Higher highs and high lows points, then the price of the asset is in uptrend and Downtrend when you see price making lower lows and lower highs. This movement of price shows the trend that is followed by the market (means buyer's and seller's trends). There is one more trend where you can find higher low and lower low meets at the same point at different times. Also higher high and Higher low meets at the same point at a different time. Now that's called a ranging trend.

Once you understood this, you can easily understand the current trend. Once you understand the trend, you easily move in that direction in your trading. Understanding the trend and comparing it with the SNR will be one of your confirmation to enter a trade.

Example: You see the trend is down and the price hits a lower high point (which is a resistance), then you see a strong bearish candlestick appearing from that level confirms that sellers are entering from sellers area in a downtrend. This means the price is going to down at least to the previous lower low.   

5. Recent price movement - momentum

The recent entry of buyers and sellers is very important to watch for. This is because no matter what happened previously at the same point will not make sense if you ignore the most recent movement. Suppose, you currently see an engulfing candlestick from a support level, then if you refer to history in the chart that what happened last time when the price hit at the same point, you can easily understand that this is a strong support area or not ( if last time also buyers came, then this time also most probably you can expect the same if this is a strong buyer area). This reference does not work vice versa mostly.

Even if you use Simple moving averages take a period concerning current price movement and trend and not just on some fixed rule. Because the market does not follow fixed rules.

6. Candle patterns

Candle patterns do not work mostly? because a candle pattern is not made up of one candle always. There are some rules you should know to understand the candle patterns.

Rules to trade with candlestick patterns: 

1.Candlestick patterns forming at the proper/strong support and resistance work most of the time.

2.The candle pattern can sometimes be including one or two or three candles. This is where candle maths comes in. Sometimes you will see a hammer candle in one minute single candlestick. The same hammer could be there when you combine two - one-minute candlestick.

This is called candlestick maths. As a price action trader, you should know that price always talks to you with candlesticks. It could be in one word (one candlestick) or 2 or 3 words (a combination of two or more candlesticks).

3. Patterns forming at an angle greater or lower than support or resistance respectively. I.e. once the price has hit support level and shows the entry of buyers, this tells that buyers are available in that area. Wait until the price makes a hammer, engulfing, shooting star a little above that support area. (at an angle of 45 degrees approx from the previous point) then you can trust this pattern and take trade-in binary options.

Watch these two videos for in-depth information on candlestick patterns and when they work.

7.Closing of the current candle

Very important to watch the closing of the current candle in binary options. Remember, you are trading for a few mins in binary options, buyers and sellers are at every point of the chart and can enter or disappear in any fraction of seconds. Watching the closing of candles tells you half of the story. Then trend, pattern, SNR, and Momentum fit in place and completes the story. Ignoring closing of the candle and hurrying to enter the binary options trade is like jumping into the well without knowing how to swim and also not knowing the depth of that well. So never ignore to observe the closing of the current candlestick.😊

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⛔ This is not investment advice, your capital is at risk. You should never invest the money that you cannot afford to lose ⛔