There is no denying the fact that if a trader is to be successful in binary trading, they must find and use a trading strategy that they will find not only easy but effective as well. That is why a trader needs to sample or study various strategies in order to get the pros and cons of using each one of them.
One of the commonly used strategies in binary trading is the Pinocchio strategy.
This strategy has been tested and found to be precisely what traders need in today’s binary options trading in spite of it having a few shortcomings and there.
You certainly must have heard about candles in technical charts, right? Well, every candle can tell us about five pieces of information. On the other hand, the body of the candlestick normally tells us the price in which an asset opened at and, at the same time, closed at. It also does tell whether the market was bearish or bullish simply by if it is dark or light.
It is important to understand how to interpret these candlesticks if you are looking forward to using the Pinocchio strategy. That is for the reason that this strategy looks at the candlesticks which have extremely large wicks and small bodies.
The Pinocchio strategy is based on the famous wooden Pinocchio whose nose would grow longer when he told a lie. Here, the long wick of a Pinocchio grows even longer as it tells the traders that the market might be lying in spite of the fact that it is trending in one direction and, therefore, it can trend towards the opposite direction.
There are some people who call the Pinocchio strategy the pin bar strategy.
Pinocchio strategy – how is the nose spotted?
Those who are new to Pinocchio binary options trading strategy, it is important to learn where the nose also called the wick is. You have to choose the software of your choice for you to set the chart such that it displays the asset that you want to trade for the day and for the period of time that you are supposed to trade. The next thing to do is keeping a keen eye on three consecutive bars which consist the Pinocchio. The middle bar should be way above or way below the other two. For the best results, be keen on where the center bar opens or closes on one end. Also, be keen to see that the center bar is more than half longer than the other two bars. This will be your nose, the longer the nose the lower the price and, consequently, the shorter the nose the higher the price.
Pinocchio strategy – considerations
Pinocchio strategy requires that a new trader be trained on how to use it, and once you do, you will find that it is highly reliable and accurate. You also need to learn when the nose is a countertrend for you to stop a large loss. You need to practice the strategy in a demo account till you get it right before you can invest your money and use it in a real trade.
Pinocchio strategy – where it could go wrong
There can be a problem at the beginning if you do not have the right amount of experience. That is for the reason that this is a bit of a technical strategy. Timing is vital here; you must enter the trade only when it is right for you not to miss an opportunity.
The major concern with this strategy is that you cannot just enter the trade at any time after every pin bar lengthens and you also need to have studied both the strategy and the market. The strategy also has to be used with a large stop loss.
Pinocchio strategy – why use it?
In the event that you are trading in a trending market, you have to take the trade only if it is in line with the trend. It is a very reliable strategy since it is very accurate since the pin bar gives you an indication on all the key players in the market and how they are behaving. However, you have to be very patient and wait for the bar to close so that it can become Pinocchio. This will help you get a clear indication on what step to take next. The other thing that you have to be very careful about is the environment surrounding the market that the trade is taking place in.
This is certainly not the kind of a strategy that you will just follow blindly. Contrary to that, it is the kind of strategy that you use in trending markets only and in ranging markets too.
Pinocchio strategy – important things to understand
When using the strategy, you will have one or more candles. The candles that are there will either be black or white. This is being clearly marked. The strategy will always tell you when the market is bullish or bearish which is the main information that you will use to know what step to take in your trading.
Pinocchio strategy – signals to look out for
- The Pinocchio bar in binary options trade should have a lengthy wick or shadow that will be the lead on the current market trends
- Place the call or put options based on what you see on the third candle that is moving either downwards or upwards.
Pinocchio strategy – conclusion
It is without a doubt that you need an effective binary options strategy. There are so many out there that you can choose from, some are quite easy to use while others are somewhat complex. But the most important thing you need to consider is the success rate of the strategy that you will go for. The Pinocchio strategy will not disappoint you. You are likely to make 70% profits from this strategy. Once you learn all the basics, it will be easy to apply and is a great quick way to make money. You will need the basic markets too and a bit of experience on tools as well.