The Doji binary options’ strategy is a pretty simple model that can be found on a chart. This strategy will be suitable for both professional traders and beginners. Furthermore, the usage of the binary options’ indicators is not necessary in this strategy. Earning a profit is possible using this simple pattern.
The Doji candlestick chart pattern forms in the market quite often. It consists of only one Japanese candlestick. This candlestick has to have the minimal size, in other words, the range of closure or opening of this candlestick is almost equal to zero. This candlestick has to have big shadows. In other words, within the trading period, which includes formation of this candlestick the extreme point’s range is pretty big. Finally, there has to be the strong movement to the certain side, ascending or descending trend, before this candlestick appears in the market.
How to trade using Doji candlestick correctly?
In the following, we will consider this candlestick model and its trading signals in more detail. As mentioned above, the Doji candlestick model has to follow several conditions to work off. The previous trend is one of them. Forecasting further market movement is possible using the Doji model. In other words, a trader can forecast what will happen in the market in the nearest time, make the appropriate choice, and earn profit.
If the Doji candlestick model is forming in the market, then the reverse is possible in the nearest time. At the same time, model’s formation has to occur either on the top of the market or on its bottom. Model’s formation in the middle can lead to the continuation of the current trend. How to determine, whether the market has reached its extreme points or the price level has not reached its peak yet? Doing this is very easy using support and resistance lines. It is necessary to find several minimums and maximums and draw the relative levels on it. After this, you will be able to determine where the price is currently.
As for the Doji model itself, using it as the trading signal has to be very careful. In order to buy the certain binary option, it is desirable to wait until confirmation. The next candlestick which closes higher or lower than the Doji’s extreme points can be such confirmation. For example, if there was the descending trend before the Doji’s appearance. In this case, the pattern’s formation occurs near the support level, and a trader is recommended to buy the Call option. But in order to receive a better signal, it is desirable to wait until the next candlestick will exceed the bound of the top Doji’s shadow. After it happens, you can buy the Call binary option.
The same can be said about the situation when the price was in the ascending movement before the Doji model has appeared. A trader is recommended to prepare for the Put option’s purchase when the Japanese candlestick model Doji has formed on the chart. In order to be confident in the signal, it is desirable to wait until the next candlestick will break the minimum of Doji. This is the time for the Put option’s purchase.
There are also some recommendations on how to use the Doji binary options’ strategy appropriately. For example, it is advisable to set the end of the trading day as the expiration time because there can be the market’s noises at the low-end time scales which can lead to the trader’s losses.
If the Doji binary options’ strategy seems too complicated for you, you can choose any other binary options’ trading strategy.