IQ Option candlestick strategy pdf
Length of body of candle which helps to learn some information about future of market and its tomorrow behavior. If it is long and green, it means that now well-known buyers are going to take part in the market work. If it is red and long, persistent sellers are going to take part in the market work.
Length of shadow of candle which helps to learn present situation in market or behavior of buyers and sellers. If you see a long upper shadow, the following signal is set: sellers win buyers. And if you see that the candle has a big lower shadow, sellers cannot win buyers.
Negation which is the simplest rule of all ever existed. If market does not move toward necessary direction that was set before, during analysis of candle body and shadow length, market is likely to change direction.
It is one of the oldest and trustworthy currency market analysis methods. Its effectiveness concludes in candle being a full price information holder. That’s why with its help it is possible not only evaluate current market situation, but also foresee future. It is worthy of note that opposed to many indicators, this tool analysis does not follow market, and signals appear not at the time when the main move has already been made.
Main work strategies
It is necessary to follow some simple rules:
- not only the instrument figure formation is important, but also its appearance; the first and second factors are equally important;
- marketing in oldest time frames is more effective and safe; the instrument on little periods of time make many false signals;
- it is the price that only counts; no additional tool is used in this analysis.
All people who practice marketing on this instrument should know these rules. Marketing strategies are not always supposed to have complex approach, and its principles are very often limited by entering in transaction after necessary figure formation.
Pin-bar is one of the most important reversal figures in this kind of analysis. It is an instrument with long shadow, size of which is twice or even three-four times as long as body. Price of opening and closing are practically identical.
Such instrument appearance means that the market exhausted its movement in trend and is going to reverse.
Other patterns marketing
Other simple and popular figure in this analysis is engulfing figure. It can be both bull, and bear.
The tool formation consists of two candles. One of them conclude trend, and the second is a signal of reversal. The second one usually has a large body and absolutely small shadows. Its focus should be opposite to the main trend which dominated before. Body of the first, small instrument should be fully placed in the diapason of body of the second.
This analysis is a universal algorithm with the help of which you can earn in currency market of Forex. Regardless of the fact that number of such figures is more than a dozen, or maybe two dozens, most effective and efficient are two models described in this article. Remember that marketing profit depends on chosen by you agent very much.