Level (Support and Resistance) is one of the best indicators that have a high reliability in options trading. But when price enter the support or resistance zone, it is difficult to identify a reasonable entry point. Pin Bar candlestick will give a safe signal for you to enter a trade.
In this guide, I will introduce the most detail of this IQ Option trading strategy: Support and Resistance combining with Pin Bar candlestick pattern. You can apply this winning strategy on your demo account easily.
IQ Option trading strategy: Pin Bar with Support and Resistance levels
Basic set up in IQ Option
Choose trading assets including 3 main currency pairs: AUD/USD, USD/JPY, EUR/USD.
Japanese 5-minute candlestick chart.
The expiration time is 15 minutes or more.
Standard Pin Bar candlestick: Bullish Pin Bar has its body pointing upward and the tail pointing downward. Conversely, Bearish Pin Bar has the body pointing downward and the tail pointing upward.
Identify resistance and support levels.
HIGHER = Price is in the Support zone + Bullish Pin Bar
Explain: When price enters the support zone, you predict that the price would increase. Bullish Bin Par is a reliable candlestick that signals the price will rise in the near future => Opening a HIGHER option now. If you choose the expiration time that is 15 minutes or more, it is an extremely safe option.
LOWER = Price is in the Resistance zone + Bearish Pin Bar
Capital management method
A suitable capital management method for this strategy is Martingale. But you have to control risks carefully. A cycle consists of 3 options:
1st option bets $10.
2nd option bets $30.
3rd option bets $100.
=> If you win 1 out of 3 options, return to the 1st bet level.
Some rules you have to remember
Do not enter consecutive options. Please remember by heart. Absolutely not enter consecutive options. Don’t open an option right after the previous one ends.
If the price keeps moving up without any signs of reversing when Pin Bar appears at the resistance zone, you should not open LOWER options at the point => the risk of losing is very high.
In the same way, if the price breaks the support zone and continues to fall, it is better to wait for a better opportunity to open a trade.
Review IQ Option entry points
Price breaks the resistance level => The old resistance level has become a new support.
Bullish Pin Bar appears at the newly formed support zone => Open a HIGHER option with the 25-minute expiration time.
The price increases significantly and breaks the resistance level => The old resistance level becomes a new support zone.
Bearish Pin Bar candle appears and retests the support zone it just passed => Entering a HIGHER option that ends in 25 minutes.
Price falls and surpasses the support level => The old support level becomes a new resistance.
Pin bar candlestick appears and the price retests the resistance level it just passed => Entering a LOWER option that ends in 15 minutes.
This is an extremely effective and flexible trading strategy. You can even trade when the market tends to move sideways. A combination of a Pin Bar candlestick and support/resistance provides a safe entry point. At the same time, an option with a long expiration time will help you keep your mind calm.
In the next days, we will write and test other trading strategies to support you more. Please wait for our next articles. Thank you a lot for following us.