In the series of articles from today on, we will share with you trading strategies in detail so that you can master how to trade in Binomo. The strategy that we would like to introduce today is the Morning Star candlestick pattern signal, combined with the support indicator. This is a simple but very effective way to trade in Binomo.
Basic Settings Preparations
1. The 5-minute Japanese candlestick chart and the assets: EUR/USD, USD/JPY, AUD/USD
2. The expiration time is 15 minutes or above.
A Standard Morning Star Pattern Consists Of 3 Candles
• First candlestick: Strong bearish red candlestick with a long body showing that the price is plummeting
• Second candlestick: Doji candlestick or Spinning Top candlestick
• Third candlestick: Green candlestick with at least ½ length of the first candlestick.
One Morning Star variant is a pattern in which, between two large red and blue candles, there are also Doji and Spinning Top candles. It means that the prices stop falling in the support zone and prepare for an uptrend.
The Formula For Opening Orders
UP = Prices Fall Into The Support Zone + Morning Star Candlestick Pattern.
When the price falls into the support zone with a strong bearish candle, the second candle which is a Spinning Top candle (or Doji), will show the reaction of the price against the levels. Then the third candle is a sign that the price will rise again. This is the way that creates a Morning Star candlestick pattern in the support zone.
Capital Management Method
For every trading strategy, you must choose a suitable way to manage your capital in order to optimize it. With this trading strategy, we choose the Classic capital management method, which means that we will open orders with a constant amount.
The explanation for this is that although Morning Star is a candlestick pattern with high accuracy, it rarely appears on the price chart. So the Classic capital management method would be the most reasonable.
1. When the price shows signs of creating a Morning Star candlestick pattern, focus on observing and opening orders as soon as the third candlestick of the pattern closed.
2. After opening orders, you should get your hand off the mouse, or even shut down the computer and do other things. This will avoid unintended psychological impact while waiting for the orders to be closed.
3. Do not stuff orders (“stuff” means open too many orders one after each other), even if you opened orders correctly but still lost. Simply consider that the probability of correct of the strategy did not happen. Stay calm and wait for the next opportunities.
Some Entry Points When Opening Orders In Binomo
Order 1: after a strong bearish trend, the price strongly touches the support zone and creates a Morning Star candlestick pattern. Open UP orders with the expiration time of 30 minutes (opening order at 15:30 and ending at 16:00)
Order 2: the price goes up over the resistance zone and then bounces back to test this resistance level (the price is now in the support zone) with the Morning Star candlestick pattern => Open UP orders with the expiration time of 25 minutes (opening order at 14:20 and ending at 14:45)
Through the above article, we hope that you have mastered how to trade using the Morning Star candlestick pattern. This is a basic strategy but used by a lot of traders when trading in Binomo. You can manually test this strategy right on a demo account to get used to it.