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With the help of the triangle pattern, a simple but effective strategy for binary options was developed: the breakout of the triangle. In view of the large number of triangle formations at different time intervals, it makes the strategy quite profitable.
The use of graphic patterns in binary trading is not of little popularity, but all because their formation on the quote chart of an asset has a high frequency.
Therefore, pattern trading is used as a highly effective approach to option trading.
Right now we will describe a classic example of this type of trading - a breakout strategy with high profitability: Triangle Pattern.
Signal generation mechanism
Without going too deep into the theory, the pattern is a cyclical pattern formed on the price chart of an asset.
This pattern appears in areas where market fluctuations fade, which looks like a triangle, which is limited by inclined trend levels of resistance and support.
In the trading process, it all happens like this: having made an impulsive decline or growth, quotes begin to reduce the range of their fluctuations almost to complete attenuation.
As a result, a certain range is formed on the asset chart, which can be limited by trend levels.
Read also - Binary options signals for free online!
Approximately this whole picture is displayed on the chart:
As you can see, to build a triangle pattern, we use a special tool from graphic service using this advanced platform.
This tool greatly simplifies the application of such a strategy. By the way, the Binomo broker platform is considered one of the best platforms for option trading in the binary market.
This broker provides the following list of services and trading conditions:
- Professional platform for option trading with technical market analysis tools;
- Excellent selection of trading assets;
- Favorable trading conditions – the initial deposit size is from $100, the minimum lot amount is $5;
- High-quality training on progressive programs and daily analytics from professionals;
- Demo account for training on a real trading platform;
- Free Signals for a deposit amount of 250$ when registering a new trader;
- Comfortable and fast profit withdrawal service;
Thanks to the broker services described above, you can carry out comfortable, and most importantly, profitable binary options trading.
Algorithm for concluding transactions according to the "Triangle Pattern" strategy
After we have identified the triangle pattern on the trading chart, it can be used to predict the future trend of the market as accurately as possible.
A trading signal appears as a breakout of one of the trend levels, which are the edges of the graphic pattern.
When quotes break through the edge of trend resistance, deals are made with a forecast UP ↑:
And when the price breaks through the trend support level, which is also a signal to trade, deals are made DOWN ↓:
As you know, asset market fluctuations are heterogeneous, that is, asset price quotes make impulsive fluctuations with high frequency, the fading of which forms a triangle pattern on the chart.
That is why this breakout strategy generates signals with a high cyclicity.
- On average, up to 5 patterns appear on a tick chart for 1 trading hour, on the signals of which you can extract quite a hefty profit from binary trading.
The Triangle graphic pattern usually generates signals of different time intervals, so it is quite difficult to accurately determine the relevance of such a signal.
It is recommended to conclude transactions from a rather narrow range of expiration periods from 1 to 3 minutes.
Trading in this range allows you to minimize the risk of closing a deal at a loss, so the above range is the most effective for trading.
This time will not be enough for quotes to reverse and move in the opposite direction to the forecast.
Also, competent money management will help to minimize the level of losses in this breakdown strategy.
The amount of each transaction concluded in the triangle pattern must be limited to 3% of the volume of the trading deposit.
For beginners in binary trading, we recommend trading with the lowest trades that this broker offers - at a cost of $5. In this trading mode, losses will be minimal.