Chart models provide traders with a possibility to forecast the further price behavior. The binary options’ triangle strategy is based on one of such models. There are several types of triangles. One of them can indicate the price’s breakout upwards, other show that the price will move down. In the following, we will consider all of existing triangles, as well as the possibility of the Put and Call options purchase depending up the situation.
Binary options triangle chart patterns: types of triangles
The binary options’ triangle strategy recommends buying the Call options when it comes to the ascending triangle.
Chart pattern Ascending triangle
In the majority of cases, the ascending triangle is formed during the ascending trend. We can draw the visual line of resistance and support on a chart. At the same time, the resistance line will be horizontal, and the support that spreads through the growing minimums will be directed at the small angle to the resistance. In total, the ascending triangle can have about three price waves (in other words, consecutive descents and ascents of quotes). If this pattern is being formed correctly, the third wave is the final one, and after it the price breaks out the resistance line and moves up. It is recommended to buy the Call option at this time exactly.
Chart pattern Descending triangle
The binary options’ triangle strategy recommends buying the Put options when it comes to the descending triangles. This type of the chart’s pattern is formed during the descending trend. The support line of the descending triangle is horizontal, and the resistance line is drawn on the constantly lowering maximums. There can be about three price waves with both descending and ascending triangles. The third wave will be the final one and has to break out the support line, and this situation is identical to the situation with the ascending triangle. A trader can buy the Put option at this time.
Chart pattern Symmetrical triangle
If there is the symmetrical triangle pattern forming on a chart (lines of resistance and support are drawn on the lowering maximums and growing minimums), the Triangle strategy recommends waiting until there is the break out of one of the triangle’s borders (this is because the symmetrical triangle doesn’t provide the information about the direction of the price, when it exceeds the borders of a triangle). In this case, the Call option has to be bought after the break out of the resistance line, in other words, the top border of the triangle. And the Put option’s purchase is beneficial when there is the break out of the support line, in other words, the bottom border of the triangle.
There are another two varieties of the triangles which can be used within the binary options’ triangle strategy. These are bullish and bearish wedges. The essence of this pattern consists in a fact that its top, where lines of support and resistance meet, is directed either up (bearish wedge) or down (bullish wedge). When the bearish wedge appears, it is necessary to wait until there is break out of the support line from up to down. After this, you may buy the Put option. As for the bullish wedge, when it appears on a chart, it is necessary to wait until its price breaks out the support line. After this, you can buy the Call option.
It is necessary to note that the chart pattern Triangle requires the obligatory confirmation, in other words, the break out of one of the lines. It is not recommended to buy options when its price keeps within the triangle because there is a probability that this pattern may work off in another way than a trader expects.
In a conclusion, we can say that the binary options’ Triangle strategy is the perfect tool for the chart’s analysis of the market. This strategy provides a trader with the perfect trading signals. But the experienced traders prefer to use more than the single strategy in their trading. You can use the section binary options trading strategies in order to complete your toolkit.