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Trend is the movement of price in one direction for a long period. Therefore, after identifying the trend of the current price, you can easily predict its direction in the future.
Trends are divided into 3 types: Uptrend, Downtrend and Sideways trend.
An uptrend is formed when the price increases continuously. It creates the next bottoms and tops that are higher than the previous ones.
Specifically:
• 3rd bottom is higher than the 1st bottom. The 5th bottom is higher than the 3rd bottom.
• 4th top is higher than the 2nd top. The 6th top is higher than the 4th top.
=> This is an uptrend.
A downtrend is formed when the price keeps falling. It creates the next tops and bottoms that are lower than the previous ones.
For example,
• 4th top is lower than the 2nd one. The 6th top is lower than the 4th.
• 3rd bottom is lower than 1st bottom. The 5th is lower than the 3rd.
=> This is a downtrend.
Most of the time the market will be in a sideways trend. The price has been moving sideways for a long time to make the following tops equal to the previous one. The same goes for the bottoms. Professional traders won’t trade when the price goes sideways.
For example,
• 2nd, 4th and 6th top are equal.
• 1st, 3rd and 5th bottom are equal.
=> Sideways market.
Naturally, the trend only exists for a certain time. Thus, you need to know the knowledge to identify trend reversal signals.
For example, the price is in an uptrend. As we said above, the next bottoms and tops are higher than the previous ones. But suddenly this rule was broken.
The next bottom is lower than the previous one. And the next top is also lower than the previous top. This is the sign of a trend reversal => The market will change from an uptrend to a downtrend.
The price goes sideways and accumulates for a long time. Then it breaks out of that sideways trend to develop a new one.
Many articles show that you only need to use Trendline (a straight line) to connect the bottoms (uptrend) or tops (downtrend). That’s how to identify a trend. Ideally, this is it.
But in fact, the price never moves like that. It still satisfies the conditions of Uptrend. But you can’t draw a trendline to connect these bottoms together.
Therefore, it is not always possible to use Trendline to identify price trends. Just use Trendline as a tool to make it easier to predict and open options in IQ Option.
Basically, the formula for trading options will be to identify the main price trend, then look for signals to buy options.
Rules: In an uptrend, just wait for the signal to buy HIGHER options. On the contrary, in the downtrend, wait for the signal to buy LOWER options. Except for the sideways trend => Do nothing.
In this tutorial, I will combine Trend and Signal (Candlestick/candlestick pattern). These are candlesticks or special candlestick patterns famous for their names as reversal candlestick patterns. But when combining with Trend, we can use it as retracement candlestick patterns that continue the price trend.
Requirements: Japanese 5-minute candlestick pattern. The expiration time is 15 minutes or more.
Trading technique:
HIGHER = Uptrend + Bullish candlestick pattern (Bullish Engulfing, Tweezer Bottom, Bullish Pin Bar, etc)
LOWER = Downtrend + Bearish candlestick pattern (Evening Star, Tweezer Top, Bearish Pinbar, Bearish Harami, etc)
You should use the demo account to test the strategies around the price trend. It’s not only to experience but also to draw for yourself a specific trading method in IQ Option. In the following articles, we will only use this trading method to make money in IQ Option. Good luck!
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]]>CCI indicator satisfies these requirements quickly and accurately. This article will show you how CCI works and how to use it to trade options in IQ Option.
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CCI stands for Commodity Channel Index. It is an indicator used in technical analysis of financial markets. CCI also belongs to the group of oscillating technical indicators.
CCI indicator oscillates between +100 and -100 fixed levels. When the indicator rises above +100 or drops below -100, it signals overbought and oversold conditions.
(1) Uptrend.
(2) The price goes up but CCI falls (also known as the bearish divergence). In short, it’s the reversal signal from uptrend to downtrend.
(3) Downtrend.
When using CCI, you can see the momentum is renewed every time CCI drops below -100. If the indicator starts rising above -100, the trend will continue. It also shows that the trend is getting stronger.
CCI divergence is the phenomenon of CCI indicators moving against the price. It means the price increases but CCI momentum indicator decreases. Or vice versa, the price decreases but CCI increases.
For example, the price is in an uptrend but CCI is falling. This is considered a divergence => A trend reversal is about to happen from upward to downward.
CCI indicator is a momentum indicator that tells us whether a trend is strong or weak. Therefore, the best way to trade in IQ Option is to buy options that are 15 minutes or longer when a strong trend is identified.
CCI indicator is an effective indicator when identifying trends. Thus, it should combine with Heiken Ashi candlestick chart to increase accuracy.
Requirements: 5-minute Heiken Ashi candlestick chart + CCI. And the expiration time is 15 minutes or more.
Trading tactics:
Open HIGHER options = Heiken Ashi candlestick chart turns from red to green + CCI is below -100 (red) then moves up and cuts -100.
Open LOWER options = Heiken Ashi candlestick chart turns from green to red + CCI is above +100 (green) then moves down and cuts +100.
In case CCI divergence appears in the overbought or oversold zone, it gives safe entry points when working with a strong reversal candlestick pattern.
Requirements: Japanese 5-minute candlestick chart + CCI. Besides, the expiration time is 15 minutes or more.
Trading tactics:
HIGHER = CCI divergence occurs in the oversold zone + Morning Star candlestick pattern.
LOWER = CCI divergence occurs in the overbought zone + Tweezer Top candlestick pattern.
In the next articles, we will update more strategies of CCI indicator for you. Please follow us at Iqtradingpro.
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Engulfing candlestick pattern is created by a candlestick that engulfed all previous candlestick price attempts. It also signals a trend reversal. This candlestick is called Engulfing candlestick.
Furthermore, Engulfing candlestick is usually long that covers the entire previous candlestick. The color of Engulfing candlesticks is a signal to forecast the market trend. If it is green, an uptrend is incoming. If it is red, a downtrend is about to come.
Bullish Engulfing candlestick is a pattern that usually appears at the end of a downtrend. This is a strong bullish candlestick. Bullish Engulfing candlestick covers the whole previous bearish candlestick. Following, the trend is about to reverse from downward to upward.
In general, a basic Bullish Engulfing candlestick pattern consists of 2 candlesticks.
• The first candlestick is a red bullish candlestick.
• The second candlestick is a green one that rises sharply and covers the first candlestick.
A complex Bullish Engulfing candlestick pattern can be formed by more candlesticks. However, it always ends with a green engulfing candlestick increasing sharply and covering the previous candlesticks. In this case, it is a very strong signal for you to open a HIGHER option in IQ Option.
Contrary to Bullish Engulfing, Bearish Engulfing candlestick pattern usually appears at the end of an uptrend. The market is expected to decrease in the near future. Moreover, Bearish Engulfing candlestick is a long red candlestick that covers the whole previous green candlestick.
Simple Bearish Engulfing pattern consists of 2 candlesticks.
• The first candlestick is a green bullish candlestick.
• The second candlestick is a strong bearish one (red and long) covering the previous green candlestick.
A complete Bearish Engulfing candlestick pattern can be created by multiple candlesticks. It also ends with a red and long Bearish Engulfing candlestick covering the previous candlesticks. In IQ Option, you can open LOWER options when the Bearish Engulfing pattern appears.
This is one of the extremely reliable signals you can use to buy options. Therefore, focus on the color of the Engulfing candlestick. If Engulfing is green, buy HIGHER. And in case it’s red, buy LOWER.
Requirements: Japanese 5-minutes candlestick pattern. In addition, the expiration time is from 10 minutes or more.
Trading method:
HIGHER = Bullish Engulfing + Support.
Explanation: Bullish Engulfing candlestick pattern is a signal that the price will increase. When combining with the support level, it can predict an uptrend precisely. Thus, you can open a HIGHER option.
LOWER = Bearish Engulfing + Resistance.
Requirements: Japanese 5-minute candlestick pattern + SMA30 indicator. The expiration time is 15 minutes or more.
Trading method:
HIGHER = The price moves down and touches SMA30 + Bullish Engulfing candlestick pattern.
Explanation: When the price is above SMA30 => It is an uptrend. When it hits SMA30 and creates a Bullish Engulfing candlestick pattern. As a result, there is a high probability that it will rebound to resume the trend. Hence, open HIGHER options.
LOWER = Price moves up and touches SMA30 + Bearish Engulfing candlestick pattern
Iqtradingpro will have more articles about SMA and Engulfing reversal candlestick pattern strategy. This is a standard trading options technique with trend and signals. If you find this article helpful, please leave a comment below. Thank you so much.
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Parabolic Sar is a technical indicator used to determine the direction of a price, as well as a warning when the price changes. It is also known as “Stop and reverse system”.
On the chart, Parabolic Sar appears as a strip of dots placed above or below candlesticks. When the dots below the price are considered as the bullish signal. On the contrary, the dots above the price show that the price is in a downtrend.
=> When the dots change their positions from the price, they show that the price direction may be about to change.
In (1) and (3), Parabolic is above the candlesticks => The market is falling => Parabolic Sar buy signals => Open a LOWER option.
In (2), Parabolic is below the candlesticks => The market is rising => Parabolic Sar buy signals => Open a HIGHER option.
To set up Parabolic Sar indicator: (1) Click the indicator box => (2) Trend tab => (3) Select Parabolic Sar.
If you use this trading technique, you only need to use the candlestick chart and Parabolic indicator. All you have to do is to focus on the Parabolic changing point.
HIGHER = Parabolic moves from above to below the candlesticks.
LOWER = Parabolic moves from below to above the candlesticks.
Parabolic Sar can identify the correct trend in a short period of time. Besides, SMA is an effective long-term price prediction. This will give a perfect IQ Option trading strategy.
Requirements: Japanese 5-minute candlestick chart + Parabolic Sar indicator + SMA30 indicator. The expiration time is 15 minutes or more.
Trading guide:
HIGHER = Morning Star + Parabolic reversal candlestick pattern is below the candle + Price crossed the SMA30 line from below.
Explanation: The reversal signal is Morning Star candlestick pattern + Parabolic is below the candlesticks => Uptrend. The entry point is right after when the candlestick that cuts SMA30.
LOWER = Evening Star reversal candlestick pattern + Parabolic is below the candlesticks + The price moves up and cuts SMA30.
In this way, Parabolic indicator will play a role in identifying the trend. The signal to trade will be candlestick patterns that continue the trend. If you don’t know all of the reversal candlestick patterns, please read here. All about reversal candlestick patterns in IQ Option.
Requirements: Japanese 5-minute candlestick chart + Parabolic Sar indicator. The expiration time is from 5 to 15 minutes.
Trading guide:
HIGHER = Bullish Parabolic Sar indicator + bullish candlestick pattern (Tweezer Bottom, Three White Soldiers, Pin Bar, etc).
LOWER = Bearish Parabolic Sar indicator + bearish candlestick pattern (Three black crows, Pin Bar, etc).
You can practice the above trading strategies in IQ Option through a demo account. Good luck!
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]]>Three Black Crows candlestick pattern appears rarely. But its winning rate is almost 100%. Through this article, we will guide you on how to identify and trade with Three Black Crows reversal candlestick pattern.
Three Black Crows is a candlestick pattern that signals an upcoming price downtrend. It usually shows up after an uptrend. You can recognize this pattern easily thanks to three consecutive red candlesticks in a row.
Three Black Crows are made of 3 candlesticks.
First candlestick is a bearish red candlestick.
Second candlestick is also a red one. However, its opening price is inside the first candlestick. The closing price is almost equal to the lowest price of the candlestick. It means there is no candlestick shadow or just a short shadow).
Third candlestick is another red candle. It has the same features as the second candlestick.
In IQ Option, Three Black Crows candlestick pattern is a signal for you to buy LOWER options safely and effectively.
As mentioned above, Three Black Crows has a high probability of reversing from uptrend to downtrend. Indicators that identify the reversal point such as SMA, RSI, Bollinger Bands are all good when combining with 3 black crows to increase safety when trading.
Requirements: Japanese 5-minute candlestick pattern + RSI indicator. Open LOWER options that have the 15-minute-or-more expiration time.
Trading guide: Three Black Crows + RSI in the overbought zone = LOWER
Explanation: RSI indicator from the overbought zone crosses 70 => The price tends to decrease. When 3 Black Crows candlestick pattern appears => Open a LOWER option.
Requirements: Japanese candlestick pattern + SMA30 indicator. Buy LOWER options with the expiration time that is 15 minutes or more.
Trading guide: Three Black Crows + The price moves down and cuts SMA30 = LOWER.
Explanation: The price cuts SMA30 from above => the trend reverses from upward to downward. The entry signal is Three Black Crows reversal candlestick pattern.
With reversal candlestick patterns like Three Black Crows, you should customize the expiration time from 15 minutes or more. It’s due to the face that long-time options have a higher winning rate. Besides, your psychology state will be more stable through trading time.
Get started with a Demo account in IQ Option now. Trading demo will definitely help you improve your skills. Please don’t hesitate to leave a comment below. Thank you for your time.
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Three White Soldiers candlestick pattern is a bullish pattern. It often appears at the end of a bearish cycle to give signals of a trend reversal from downward to upward.
In IQ Option, 3 White Soldiers candlestick pattern is considered as a reliable signal to buy HIGHER (bullish) options. This is a reversal candlestick set that can be recognized easily.
Three white soldiers candlestick pattern consists of 3 consecutive bullish candlesticks (green). They satisfy the following 2 conditions.
• Opening and closing prices of the next candlesticks must be higher than the previous ones.
• The closing price of each candlestick must be close to the highest price. It means that the candlestick shadow is very short.
This is the candlestick pattern appearing at the end of a downtrend. Therefore, you can only combine it with reversal indicators => Open HIGHER options.
Requirements: 5-minute candlestick pattern. Only open HIGHER options. The expiration time is 15 minutes or more.
Trading method: HIGHER = 3 White Soldiers candlestick pattern + Support level
Requirements: 5-minute candlestick pattern + RSI indicator. Only open HIGHER options that are 15 minutes or more.
HIGHER = 3 white soldiers candlestick pattern + RSI in the oversold zone (RSI moves up and cuts 30).
When Three White Soldiers candlestick pattern appears, the trend reversal probability is very high => It gives you safe entry points when trading IQ Option. Thus, be patient and take the opportunity.
If you find this article helpful, leave us a comment. In case you want to try this candlestick pattern, register for a free Demo IQ Option account in the box below. Thank you for following us!
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(1) Currency pair: AUD/USD.
(2) Chart: Japanese candlestick at 5-minute candle time period.
(3) Expiration time is 15 minutes or more.
Entry signal: Trend reversal candlestick patterns.
Capital managemet: $20/Option.
Profit: 34% (earn $34).
5 options (4 win – 1 lose).
Entry signals in IQ Option.
(1) Evening Star, the candlestick pattern reversed the trend from uptrend to downtrend = Open a LOWER option.
(2) Morning Star, trend reversal candlestick pattern from decreasing to increasing = Open a HIGHER option.
(3) Pin Bar candlesticks (the shadow pointing upward and the body pointing downward) = Open a LOWER option.
(4) Dragonfly Doji candlestick + support zone = Open a HIGHER option.
(5) Doji + resistance zone = Open a LOWER option => Lose
If you do not know reliable reversal candlestick patterns when trading options in IQ Option, you can see here. Common candlestick pattern when trading in IQ Option.
Don’t trade only with Japanese reversal candlestick patterns. Combine them with support and resistance levels. Your winning rate will be higher.
In most of my options, the expiration time is 15 minutes or higher. Thus, the profit may be lower than when you trade short-term options (from 5 minutes or less). However, my winning rate is higher.
Each day, you only need to trade 5 options. The one who can earn money is the one who knows when to stop.
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Tweezer candlestick pattern (also known as tweezer top/tweezer bottom) is a reversal candlestick pattern. It usually appears at the top or bottom of an upward or downward price trend. It is made up of two long candlesticks with opposite colors and almost the same length. This is considered as a reversal signal during IQ Option trading.
Tweezer tops is a pattern of two candlesticks appearing at the end of an uptrend.
• The first candlestick is green. It is longer than previous candlesticks, which shows that the price has increased sharply.
• The second candlestick is red. It is almost as long as the green candlestick. Its opening price is equal to the closing price of the first candlestick. The price has suddenly fallen. This is a signal that the trend reversal from upward to downward.
Tweezer Bottoms is a candlestick pattern that appears at the end of a downtrend.
• The first candlestick is red, which has an equivalent length compared to previous candlesticks. It shows that the price is falling sharply.
• The second candlestick is green. It has the opening price equal to the closing price of the first candlestick. Its length is almost equal to the previous red candlestick. The price has suddenly reversed from decreasing to increasing.
Tweezer candlestick pattern is a reversal candlestick pattern. So it should combine with other reversal indicators. The purpose is to increase accuracy when trading in IQ Option.
Requirements: 5-minute Japanese candlestick chart + Tweezer candlestick pattern. The expiration time is 15 minutes.
Trading guide:
HIGHER = Tweezer Bottoms candlestick pattern and support level.
LOWER = Tweezer Tops and resistance level.
RSI indicator is an effective indicator that can identify market trends precisely. It also shows trend reversal points. That’s why it is suitable for combining with Tweezer candlestick pattern.
Requirements: Japanese 5-minute candlestick chart + Tweezer candlestick pattern + RSI indicator. The expiration time is 15 minutes.
Trading guide:
HIGHER = Tweezer Bottoms candlestick pattern and RSI in the oversold zone.
LOWER = Tweezer Tops candlestick pattern and RSI in the overbought zone.
Tweezer candlestick pattern can combine with a variety of indicators. I will introduce to you these strategies in the next articles. Please register for a demo account in IQ Option to experience these candlestick patterns. Good luck!
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