Pinocchio Binary Options Trading Strategy
The only way to consistently obtain good results when attempting binary options trading is to have a strategy. This will increase your chances of winning more trades than you lose and ultimately returning a profit. There are many different strategies available, over time you may wish to try all of them, the one that works best for you will not necessarily be the one which works best for someone else. There are many different factors which come into play. One of the most popular is known as the Pinocchio trading strategy. The strategy is named after Pinocchio as it is a reflection of the story. Whenever Pinocchio told a lie his nose grew. This strategy forces you to look at the market and understand when an asset is moving in one direction and has been for a while, but is actually ready to go in the opposite direction even though this is against the trend of the market.
An asset which is likely to be a Pinocchio is one which has opened at a low price and closed at a much higher price. The same can be true in reverse; it has opened at a high price and closed much, much lower. Anyone who has been trading in binary options for a while will recognize that the asset in question is trading too fast, the price should not normally fluctuate to this extent. The likely outcome is that the price will crash to correct the issue and balance the market again. When you spot an asset behaving like this you place your trade against its current run.
The strategy is very easy to understand and with a little practice can prove to be a good way of starting your binary trading experience. Perhaps the greatest benefit of this approach is the lack of asset knowledge which you require. You simply need to study the price movements of various shares and trade according to those which appear to be over extending their price; i.e. rising too fast. You do not need to understand the more technical issues involved in binary trading or the stock markets; the strategy is effective in all types of markets and can quickly boost your returns and therefore your capital reserves.
It can be used when you first start out to help gain a deeper understanding of the market, it can also be used to supplement other strategies or it can be used by itself; even as a veteran trader.
This strategy is often compared to the candles used in technical drawings. The main part of the candlestick represents the price that a specific asset opened at and subsequently closed at. The colour of the candlestick will inform you whether the market is bearish (a dark candle) or bullish (a light candle). The wick of the candle can be used to show the optimum price the asset traded at during one trading period. It also shows the lowest price it traded at. Understanding the information provided by these candles will allow you to trade successfully with the Pinocchio strategy.