Trading is all about finding opportunities and making the most out of them. Traders with the ability to recognize these opportunities increase their potential to become successful with their trades and become long-term binary options traders. Binary options that have a higher probability of expiring in one direction rather than the other occur each and every day for countless traders who can spot them. But how are they spotted?
The first step is to become familiar with some of the more prevalent technical patterns and what they mean. Asset charts and can be invaluable tool in the right hands. One of the best known patterns is called “Reversal”. Once a trend is about to be reverse, the chart tends to display certain patterns that can be easily recognized.
These include three shoulders and come in a number of variations. These patterns are considered reversal patterns because they signal a shift in buying pressure. They are created after a price rally or decline when the asset moves between highs and pullbacks and usually provide an indication for an upcoming reversal in the asset’s value trend.
Another way to predict upcoming changes is to spot support and resistance lines. Prices tend to reverse at these points, making them particularly useful for binary options trading.
These lines are price levels in which the asset stalls, failing to climb above a resistance line or fall below a support line. In this situation, it is likely that the price will bounce within a limited range around these lines. However, if the asset breaks past either line, it is likely that the asset will continue to move in that direction until new support or resistance levels are established.
Combined with information obtained from financial news outlets regarding your asset of choice, these trend reversal patterns can be applied easily and successfully to your binary options trades, thus increasing your performance.