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Ever heard of the candlestick strategy?. While there are dozens of market analysis strategies and tools out there, candlesticks are perhaps the most important. People want to learn trading on various platforms without a proper understanding of these platforms. An example of one of these platforms is BINOMO.
So if you are interested in possible real money trading with this platform, you better start learning them now.
The essence of this guide will be to walk you through the design and to help you understand the steps involved in the candlestick strategy.
How To Use The 4-Steps Candlesticks Strategy
Candlesticks iqoptionwiki.com is the most commonly used chart type. It doesn’t matter which asset you plan to trade, you will definitely need some knowledge of candlesticks.
On the Binomo trading platform, candlesticks are also the default chart type. In the end, they can show how bears and bulls are walking in a very simple and understandable way. With the help of these candles, you will be able to make the right trading decisions and make your own assumptions.
However, simply knowing which candles are suitable is not enough. You should also know how to use them to your advantage. This is where the candlestick strategy comes into play.
Identify Different Candles
The first step to using a candlestick strategy is to practice identifying different candles. The knowledge that there are different kind of candles which symbolizes different things is key
You need to have extensive knowledge of these candles in order to make the right decisions.
- At what time in the market are they formed?
- What does it mean when this candle appears?
- How do they differ from each other?
Each market is unique and all candles, charts, and of course, markets are different from each other. This is why you should always be familiar with the various candles that you can work with in your trades.
For example, a Doji candle may be common in one market, but it can mean something entirely different in another market.
A long candle can be a great signal in market A, when in reality it is just an average candle in market B.
Learn How To Identify Signals
After identifying the various candles, you must learn how to identify signals. Remember, do not enter positions if the signals are not strong enough. Only do something when you are completely sure of the signal.
A candle that gives a strong signal has two characteristics.
- First, it is larger than all the other candles on the chart.
- Secondly, it has a much longer shadow than other candles.
Note that sometimes even one of them is enough to indicate a strong signal. It really depends on the specific circumstances.
Understand How Candles And Signals Work Together
As earlier mentioned, it’s important to remember that candlesticks can form literally anywhere on the trading chart. Sometimes the signals are quite significant, and sometimes they are completely insignificant.
If a candlestick forms at a support or resistance level, it usually gives a strong signal. This is because these are the points at which traders tend to enter buy or sell positions due to the fact that prices at these levels are prone to constant dramatic changes.
However, keep in mind that if you want to make a profit, you also need to know in which direction the change is going. Will this continue the current trend? Or will everything change?
To confidently answer this question, you need to know how to analyze all the elements together, including trends, signals, and the candles themselves.
This can help you come to the correct conclusion.