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 successfully without the help of additional tools. It is enough to observe the candlesticks and price action. Maybe it sounds simple, but how to 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 for their colour. Green candles mean the bulls are in dominance so you should go long. When the candles are red in colour you should go short because this is the time of bears domination in the market.
The other rules are to wait for a candle to develop fully before you open a position. Do not enter when the candle is merely partially formed. And avoid special candles. Open the trade with solid candles only. The special ones often develop in the markets that are characterised by high volatility. It may result in your loss as the price change quickly.
You must wait for one candle to fully develop before you enter the trade but you have only 30 seconds to do that. You cannot open a position earlier. With the chart set for 5-minute period candles, every candle will last 5 minutes. It may be easier to wait for the time that can be divided by 5 like 14:35, 14:40 and so on.
In an example below, I opened a sell transaction because the previous candle was red in colour. My transaction will last a whole candle that is 5 minutes.
This was the type of trading based on the candlesticks’ colours. 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.
The candlesticks’ method is more useful during a definite trend. When you observe a few consequent green candles it is very probable the next one will develop. Or when you notice a couple of red candles during the downtrend, it is quite likely that the next one will be in the same colour.
How to trade with price action on the Binomo platform
The 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 option expires.
One of the techniques for price action trading is using the support and resistance levels. Once you have drawn them, you can spot the consolidation of the price. 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 will 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 analyse 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.
Both methods of trading are not complicated, still, they demand from you to follow some rules. You will also have to be patient and spend some time analysing the 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 do not rely simply on luck.
Whether you choose to trade with the candlesticks or the 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 practice account where you can try the strategies without risking real money. Share your experience with us in the comments section below.
Best of luck!
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