Indicators were invented to make a trader’s life simpler and give some hints on when to enter a transaction. However, the simplest way of trading is without any of the indicators. It is possible to open positions relatively successfully without the help of additional tools. It is enough to observe candlesticks and price action. Maybe it sounds simple, but how could you actually do that? You will find the answer in this article.
2 ways of trading without using extra tools on Binomo
How to trade with candlesticks only
The principal rule when you are trading just with candlesticks on Binomo is to look at their color. Green candles mean bulls are in dominance so you should go long. When the candles are of red color you should go short because this is the time of bears’ domination in the market.
Other rules are to wait for a candle to develop fully before you open a position. Do not enter a candle that is only partially formed. Open a trade with solid candles only. And avoid special candles. The special ones often develop in the markets that are characterized by high volatility. It may result in your loss as prices change quickly.
You must wait for one candle to fully develop before you enter a trade but you have only 30 seconds to do so. You cannot open a position earlier. With a chart set for 5-minute period candles, every candle lasts 5 minutes. It may be easier to wait for the time that can be easily divided into 5 minute periods like 14:35, 14:40 and so on.
In the example below, I opened a sell transaction because the previous candle was red in color. My transaction will last a whole candle that is 5 minutes.
This was trading based on candlesticks’ colors. You do not need to worry about the price of the underlying asset. It would be a good idea to check a few previous candles though.
Candlesticks’ method is more useful during a definite trend. When you observe a few consequent green candles it is very probable the next one to develop will be green too. Or when you notice a couple of red candles during a downtrend, it is quite likely that the next one will be of the same color.
How to trade with price action on the Binomo platform
Price action involves observing the price and making assumptions about its future direction. You need to decide if the price will rise or fall at the moment your derivative expires.
One of the techniques for price action trading is using the support and resistance levels. Once you have drawn them, you can spot price consolidation. Then you need to decide where the price will go after the breakout.
In the presented example, the price consolidates within a certain range. I expect the price to fall after it breaks the support level. That is why I decided to open a sell position for a duration of 5 minutes.
You may discover that your option did not last exactly 5 minutes. It can be a few seconds less, like in my example where I opened the transaction at 15:35:13 and it ended at 15:40:00.
You want to proceed swiftly to avoid such a delay. You have to analyze the market for some time before the entry. And sometimes you may notice some additional signs that will help you in the decision-making process. Here it was the triple top formation.
Conclusion
Both methods of trading are not complicated, but still, they require you to follow some rules. You also have to be patient and spend some time analyzing price charts. You may sometimes feel it is so simple it does not require a lot of attention from you. But this is not good thinking. You must always be focused and not rely simply on a chance.
Whether you choose to trade with candlesticks or price action, make sure you follow the rules I have described in this article. They are not complicated and therefore, with a little bit of practice, you should be able to open successful transactions with them. Remember, there is a free Binomo demo account where you can try the strategies without risking real money. Share your experience with us in the comments section below.
Best of luck