The 3rd Candle Strategy for Binary High/Low is a versatile approach applicable to any market. Here's a breakdown of the setup and rules:
Setup:
Time Frame: 15 minutes or higher.
Binary Options Strategy Rules:
Identify the third candle.
Enter your trade at the beginning of the third candle and wait for it to close.
Trend Identification:
Determine the current trend using indicators like the 50SMA or 100SMA. If the price is above the SMA, the trend is up, or vice versa.
Optionally, use a Stochastic indicator (5.3.3) to filter trades. If the Stochastic direction contradicts the first and second candles, it's advisable to wait for the next "1st candle figure."
First Candle Identification:
Open a 60-minute chart or another time frame.
Locate the "first candle" situated between two candles, serving as the highest or lowest of the three candles.
Trading Opportunities:
The focus is on the 3rd candle, creating numerous trading opportunities with "three candles figures."
Trade Execution:
Buy at the start of the 3rd candle if the current trend is up, and the candles figure is ascending.
Sell at the beginning of the 3rd candle if the current trend is down, and the candles figure is descending.
When Not to Trade:
Avoid trading one hour before and after major news or significant events.
Do not trade when the 3rd candle is against the current trend.
Avoid trading if the second candle closes "inside" the 1st candle.
Scalping System with Exit Setup:
Take Profit: Set a target of 10 pips. Consider using a trailing stop order for profit maximization.
Stop Loss: Place the stop loss above or below the second candle. For a BUY, set the stop 1 pip below the 2nd candle; for a SELL, place it 1 pip above the 2nd candle.
Time Frames:
This scalping system is adaptable to higher time frames. Adjust the take profit target to more than 10 pips accordingly.
In summary, the 3rd Candle Strategy offers a straightforward yet effective approach to Binary High/Low trading across various markets. It presents numerous trading opportunities while incorporating prudent measures for trend identification, trade execution, and risk management, making it suitable for both novices and experienced traders a like.
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