Price Action and Candlestick Analysis -

Price Action and Candlestick Analysis

The goal of a trader is to anticipate the direction of the trend, and to determine the price action. It is as simple as that. All the Binary Options Strategies have the goal of anticipating the price, and this can be made with many strategies. On the other hand, a strategy is an action that you take based on some considerations. Before taking the decision to invest, you should anticipate the price; otherwise, your strategy would be for nothing. For this reason, you will have to understand what candlesticks Analysis are, and what information would give those about the price.

The candlestick Strategy Analysis

The candlestick is a graphic representation of the price action on the chart. The candlestick looks like a candle, with the difference that it has two wicks. The upper one represents the maximum price reached during the respective period, while the inferior one represents the minimum one. If the candlestick is green, it means that the opening price is smaller than the closing one, so we have a rising trend. If the candle is red, it means that the price goes down.

Some traders might consider a single candlestick as being enough to identify a trend, and this is wrong. The Binary Options Strategies must be applied after observing several intervals, each one with its own candlesticks. Longer wicks usually mean indecision in the market, so the price could go both ways. Three red candlesticks one after the other does not necessarily mean that the price would go down. If the wicks are small, it means that the traders are still undecided, and that you should wait a little longer before applying your Binary Options Strategies.

Learning The Price Action and Candlestick Analysis

Learning to interpret candlesticks is a skill needed by every trader. Besides knowing the candlesticks, you will have to know what strategies are available for you in any of cases. Sometimes, it is better to watch the 15 minutes chart, and to take advantage of the rumors in the market, but in another scenario, the same formation of candlesticks could mean a totally different thing.

Use the free trading platforms for binary options to test any of the strategies that you have learned. Even the advanced traders would test a new trading method for weeks before putting it into practice. If you don’t want to be one of those traders that just enter the market to discover that their strategy is bad, and that they would lose hundreds of dollars in failed transactions, it is better to have the patience to test all the Binary Options Strategies on the virtual platform before forcing it into the real market.

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