Binary options strategy pennant

Welcome to video 11 of the Advanced Forex Strategies Course. These patterns will occur on all timeframes. Brought to you by Investoo. So, trend trading, as I always say, is where the money is.

Trading the Flag Pennant Pattern Strategy - icamaveyi.web.fc2.com

Flags and pennants breakouts provide a way for you to get in on the next trending move. As always, our risk will be lower than our potential reward. Flags are going to be our focused.

Pennants are very similar and traded in the exact same way, but flags occur more often. So, trade in the direction of the trend, which is the direction of the flag breakout. Flags are called a continuation pattern, since they slightly more often than not break out in the direction of the prevailing trend. So, make no assumptions. A breakout in the opposite direction of the trend is also tradable. With this strategy, we can set and forget. Let math do the work.

Only trade neat flags. If in doubt, use the mini channel breakout strategy we covered in video three. An upright flag has two parts. The first is a sharp upward move, which we call the flagpole, followed by a very tight consolidation that is angled slightly lower or sideways. Very rarely, it is angled slightly up. We draw lines along the highs and lows of the consolidation.

Consolidation should be at least four bars and the breakout level neatly defined. When the price moves above the confines of the lines, enter long. Place a stop just under the pattern. Target is the height of the flagpole added to the bottom of the flag. When in doubt, use 1. If you take multiple positions, exit one position at 1.

This is a fusion, I guess you could say, of the mini channel breakout strategy, which is similar but a couple differences. So, this is taking some of the elements of that, which is a strategy I like, and applying them to this.

In the alternative case, if we have this upward flag but the price drops below the flag, we enter short. Stop goes above the pattern. We knock off approximately the height of the pattern.

An upside-down flag has two parts, once again. First is a sharp move down, which we call the flagpole, followed by a tight consolidation that is angled slightly higher or sideways. Very rarely will it be slanted down. Draw lines along the highs and lows of the consolidation. Consolidation should be at least four bars with a breakout level neatly defined. When the price moves below the confines of that flag, we enter short.

Place a stop just above the pattern. Subtract it from the top of the flag. You also have the option of using the 1. If the price rallies above the flag, we enter long. Stop goes below the pattern. Over a great many trades, it is simply that you make more on.

Oh, that got cut off. So, we have this flag here, a very sharp move down, followed by this consolidation. So, we have at least a four-bar slowdown. Or do I go short here? This is going to work out. At the end of the day, it all comes out in the wash. This is the flag. You go short right at this white line as this bar drops below it. You put your stop up here, just above the highs of the pattern, and you ride the momentum down.

Binary Options Strategies for Beginner & Expert Traders - Binary Options Gold

So, in either case, this broke out, pulled back. So, this is a flag- type pattern, where we have a sharp move, it pauses for at least four bars.

We do have defined entry points. By that, I mean you have at least a couple bars that highlight an entry point. Now, we need to figure out our target. I showed you how to do it. So, we have this sharp move higher. You can see, while we started up here, we pulled that quite a bit. This bar is where we start to notice a lot of downward movement.

This, to me, this area tested multiple times. I like that as my target. Whereas this area, it did bounce, but it came right back to it. So, this is a target that I like. Even if I enter down here. In that case, this is my risk from my stop to my entry point. So, that represents my risk, and my target is still bigger. So, the target goes from the top of the flag. So, we put it right at the top of the flag, and we can see our profit target would have been right down here, and we would have got out of that before this mess here.

If not, we still would have been able to get out down here. Even though this came all the way onside and would have showed me a nice profit, I missed my target by a long shot.

I looked at one other one too, which is a bit ugly, a bit different structure. I want to highlight a few things here as well. We have this sharp move down. Once again, it hits this level multiple times. Then, we enter this pause at four bars, basically here. Along the bottom here, I have a potential entry point based on the lows of these. Along the highs, we also start to see this as well.

Lows are edging up. So, here, we start to see a big longer- term flag. As we can see, this is much longer than four bars, but the flag develops over those higher numbers of bars. We see this rising. If this pattern continues, that is going to occur. Based on these prior moves, we know that these lows. On this type of flag, we would much rather see the break to the downside, as we do with most trend trades.

But, since we have a tendency here of the price creeping up, do not trade a breakout when the price is creeping up. So, here, looking at this major decline from the high of the pattern. So, our target would have been down here. Not going to let me select. So, once again, we can quickly see if our risk is greater than or less than our reward. So, entry point would have been right about there, our stop just above that high, basically would have been the high of this box if I just move it down a little bit.

We can see our expected profit much bigger than that, so a good trade to take. Get our target down here. So, if you want the actual numbers, we can look at that. We can see there. Moving from the entry point down to our target, looking at about 46 pips of profit.

So, once again, a few insights here. Focus more on letting the winners run out to your targets. Just let the math do the work for you. Another thing I want you to think about is the tendency of the price action. We are seeing that the price is making slightly higher highs. So, when this edges above your trend line, we know that the price is making slightly higher highs. So, we have downward momentum.

So, we want to trade more the downside breakout in this case than trading this. Once again, be conservative with your targets. So, every trade has a stop and a target.

We put those out right when we place the trade. These take time to practice and spot and trade. They look easy, but there are lots of similar looking patterns that are a low probability.

When in doubt, trade the mini channel breakout strategy in the direction of the trend only. Make sure there is a sharp move followed by a very tight consolidation or flag. Trade in the breakout direction. Place stop just outside the pattern on the opposite side of the breakout. Target is based on the height of the flagpole. For an upside breakout, we add that height of the pole to the bottom of the flag.

For a downside breakout, subtract the height of the pole from the top of the flag. I use that measuring tool on just trend lines. Makes it very easy to quickly see whether your risk is greater than your reward. The reward will typically more than compensate for your risk. But, if that occurs, reduce your target by about the height of the flag. So, usually we want to be trading in the trending direction. We looked at that one example. We had the false breakout to the upside.

We skipped it because there was a tendency for that price to be edging higher in that flag that was angled up. So, we also have an option to use a 1. This is sort of a hybrid of the mini channel breakout strategy. Trading involves substantial risk of loss. Only trade with capital that you can afford to lose. Test out strategies before using them to make sure you are able to implement them and that they work for you.

Until next time, happy trading. Contact Us Sitemap Affiliate Program Trading in financial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment.

Trading in financial instruments may not be suitable for all investors, and is only intended for people over Please ensure that you are fully aware of the risks involved and, if necessary, seek independent financial advice. You should also read our learning materials and risk warnings. The website owner shall not be responsible for and disclaims all liability for any loss, liability, damage whether direct, indirect or consequential , personal injury or expense of any nature whatsoever which may be suffered by you or any third party including your company , as a result of or which may be attributable, directly or indirectly, to your access and use of the website, any information contained on the website.

Practice Trading at eToro Now! Best Forex Brokers Binary Options Course Binary Options Strategies Forex Trading Course Forex Strategies Course Technical Analysis Course. Spread Betting Companies Binary Options Brokers USA Binary Options Brokers Forex Brokers Spread Betting Bonuses. Signals and AutoTrading Binary Options Signals Forex Signals Binary Options Auto Trading Binary Options Robot.

Contact Us Sitemap Affiliate Program. Benefits of Trading with our BO Indicator: