The popularity of the Double Red Candlestick strategy stems from the fact that it is derived from several of the more popular scalping strategies, along with the fact that it can deliver fast profits from digital options trading. On the other hand, it is viewed as being one of the higher risk strategies, so keep this in mind when deciding whether or not this strategy is right for you. Beginner level traders may want to start out with a few simpler strategies before moving on to this one.
This strategy works best when the price of your chosen underlying asset is moving back and forth within established high and low price points. To put it simply, Double Red works by taking advantage of bearish-style price movement, often making the most of short-term price activity. When applied correctly, the Double Red is powerful enough to turn large, fast profits in 15 minutes or less. It may also lead you to multiple profit opportunities.
The best trade type to use with the Double Red digital options strategy is the basic Put or Call trade. Along with this, an expiry period of 15 minutes or less should be selected. Your main focus is going to be on the level of resistance, along with the subsequent asset price activity. First though, you’ll need to locate an asset price that has been undergoing range-type movement for a while and is now revealing clear points of both support and resistance.
Making use of a five minute technical chart, be watching for the asset price to arrive at and then be rejected by the resistance level. If you note at that point the development of 2 red bear candles, consider buying a Put digital options trade at the price level of the 3rd candle inside the series. Keep in mind that any signals produced need to be acted upon no more than one hour after you’ve spotted the two red candles. If you choose to wait any longer than this, the level of accuracy is going to be extremely low.
What the Double Red delivers is very clear indicators. All that you really need to do is the make sure that the asset close point for the 1st candle is lower than the previous bull candle. Once you check that out, make sure that the closing point for the 2nd candle is positioned lower than the 1st. It really is just that simple. These clear indicators are telling you to purchase a Put contract as soon as possible, using an expiry period of 15 minutes or less.
If you have yet to master the use of candlesticks, then this digital options options strategy is going to be confusing. Also, you will need to be able to pick out the most optimal expiry periods. The Double Red strategy instructions tell you to select an expiry of 15 minutes or less, but this still leaves a number of expiry options ranging from one minute to ten minutes. Finally, you have to be in place and ready to take action. Ideally, you want to enter into a trade as soon as you see the correct candles. Especially if you want to fire off more than one trade.
The Double Red Candlestick strategy may not be the best option for new traders. However, anyone with a basic understanding of how to apply candlesticks to digital optionss analysis can use it. Some previous trading experience would certainly help, but is not required. The best time for using this strategy is when the market is less volatile. Do consider practicing this strategy several times using a non-investment testing method before using it in your preferred digital options platform.