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When trading binary options, one always needs to have some sort of a system to fall back on. Going with gut-feelings all the time is a surefire way to losing one’s bankroll and to being pushed out of trading for good. One of the best ways to establish a system which stands a good chance to work out fine is to simply adapt a proven one from trading in other markets. The Triangle Touch strategy is exactly this sort of a solution. It – like most of the best binary options trading systems – is based on the identification and subsequent exploitation of specific chart patterns formed by the candlesticks which define the price action of a given asset.
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The first step towards understanding how this strategy works is to define the triangle pattern, of which there are two sub-types: ascending and descending ones. An ascending triangle is defined by a series of candlesticks with steady highs and gradually higher lows. Such a chart-pattern is considered to predict an upward breakout of the asset price, which means that it will break through the horizontal resistance line defined by the highs of the candles, and it will not head lower than the sloping support line, defined by the gradually higher lows of the candlesticks.
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A descending triangle is the opposite of the above defined ascending one: it is defined by candlesticks with steady lows and gradually lower highs. This chart pattern heralds a downward breakout, where the asset price will break through the horizontal support line defined by the lows of the candlesticks, and it will not go higher than the downward-sloping resistance defined by the candlestick highs.
How do you trade these patterns and price-breakouts though? The situations predicted by the triangle chart patterns obviously call for the trading of the Touch/No Touch contract. In the case of an ascending triangle, the Touch zone will obviously be above the horizontal resistance line defined by the candlestick highs. The No Touch Zone will be below the sloping support line defined by the gradually higher lows. The question here is, just how high will the asset price go following the bullish breakout? There’s a pretty logical solution to this question too: by using the automatic pivot point calculator, one will find several potential resistance levels for the asset price. The first one of these levels is obviously the target.
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Wondering why is looking at triple combinations is a powerful tool for making trading decisions in Binary options? It’s simply because the price of an asset waste most of its time in consolidation, the analysis of the triple combination helps to show where the price will break out and that in return, this will help traders to determine which side of the market they want to be on.