Lesson Four:Trading Breakouts using Pivot Points - Binary Option Guide

Trading Breakouts using Pivot Points

Binary option is an exciting platform to trade in. In order to trade in binary options all you have to do is to predict if the value of a particular asset will rise or fall after a certain small period of time. If your prediction turns out to be right, you make a huge profit but if your prediction turns out to be wrong you lose everything you put on stake. Thus the binary option is a risky business not meant for beginners but for the experienced traders it is like a gold mine.
How to trade breakouts using pivot points

Using The Pivot Points

There are many methods and techniques to make the most out of binary trading. These techniques are based on the general observations made by studying the market trends for a very long time. One such reliable method is known as trading breakouts using pivot points. Pivots are the quantized horizontal lines used to mark the prices of an asset. As the name suggests, trading breakouts using pivot points deals with the analyzing the candles breaking through the pivot point. Here is a step by step tutorial to work out with this method.
Step 1: Make up your mind to act fast and be ready to take risks and start analyzing the stock trends.
Step 2: Look out for stock inactivity- Breakouts generally occur after a long period of stock inactivity i.e. stocks of an asset not showing significant gain or loss and staying within two strong pivot points for a long time. The strength of a pivot point is determined by the number of times the price of a stock touching the pivot point and not being able to cross it.
Step 3:Now check if the prices of the stock have tested the resistance level multiple times, with the points of retracement getting continuously higher. This indicates a buying pressure of the stock. When you find such a pattern you should trade in as it is a reliable signal that stock values will breakout upwards. You should place your money quickly on the prediction that the value of the stock will rise.
The opposite is also the case for a downward breakout. If the pivot levels are tested continuously with points of entrancement getting continuously lower,you can be sure of a selling pressure. The price of the stock in this case can be predicted to fall and you should put your money based on this assumption fast.

Conclusion

The pivot points are a very useful tool for binary options trading and if you are able to use them to watch price action at vital levels of support and resistance, you are likely to make good trade calls at most of the times. It should be kept in mind that trading breakouts using pivot points is a method for experienced traders only. You can easily misread the candles and make false predictions and lose your money. You should also keep away from trading using this method in volatile conditions. It is recommended that you try this method on the demo platforms before investing real money.

 

Go To Lesson Three:
Using Binary Options Tools

Go To Lesson Five:
How to Postpone Binary Options Expiration Times