The double red strategy

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You know that many of my trades are mainly reversals but if I want double red strategy binary options take a trade after a reversal I use these methods. In this screenshot we have two engulfing patterns, one bullish and another one bearish. In the first blue box we have the bullish one. Our reversal was made in the red horizontal line and this line is our support.

Then it appears a small red candle and after that a big green candle which engulfs the red. This is a buy signal. The next candle is green. In the second blue box we have a bearish signal. The big red candle engulf s the green and the next candle is negative.

We have double red strategy binary options two signals here. One bullish and another one bearish. Look at the first blue box. The red horizontal line is our resistance. The green candle makes a new higher high, hit in the resistance and makes a reversal.

The red candle open below the green and close below the green,too. In the second blue box we have the opposite. The green candle opens above the red and close above the red. In this double red strategy binary options I am always trying to avoid candles with long wicks. There are many traders who using it especially in short- term trading.

In the first blue box notice that after the reversal in the red horizontal line we have two red candles. The second one close below the first. The third double red strategy binary options in the row is red,too. This is a buy signal and the thrid candle is green. You should always need some confluence to take a solid trade. In these cases the first confirmation for me is RSI.

Furthermore,I avoid to trade these methods if there are whole numbers in the area in which we had a pull back in the past. If you are trading 60 seconds binary options like me, take a look to the 5min chart to identify if there is a strong trend.

Good Day Traders, in this article I want to show you three ways for taking trades after a reversal as I do in many cases.

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The Double Red Strategy is based on scalping and short term binary options. Both these techniques expose the trader to a high degree of risk. It is best only used when the markets are fairly flat or ranging.

Scalping and short term options both use small quick moves in the markets to make lots of small profits. The combination of these techniques makes the strategy too risky for beginners. Because of the quick trade times and the lack of risk management this strategy is often thought to be pure gambling. This is a short term strategy that looks at price action combined with support or resistance levels in the 5 minute chart. The trader looks for the price to test a resistance or support level.

In a test of resistance, two bearish candles will form. When the third candle closes lower than the first two, this is the signal to buy Puts. The reverse scenario applies when a level of support is being tested and two red candles form, hence the name Double Red Strategy. To set yourself up for this strategy, go to the long term charts, Daily or Weekly, and identify support or resistance levels.

Once you have done this, go to the 5 minute chart and see if the levels you identified on the long term charts are reflected there. If not, you will have to try and identify short term resistance or support levels.

As soon as the double candles form, be ready to place your trade. The Double Red strategy is based on the 5 minute chart, so it gives the trader the chance to profit from the smaller movement in the market and very short term trades.

It also a very simple strategy with an expiry of 5 to 15 minutes. However, you should always be ready to close your trade manually if the market moves against you. The Double Red strategy is extremely dangerous when news events are coming up and are only really at their safest during quiet periods on the markets. At the first sign of volatility or uncertainty, Double Red should be a no-go zone. The other area of danger in an already dangerous strategy is the mis-identification of the candles that signal the set up.

The Double Red strategy is very high risk and very unpredictable. New traders should not consider using it. It is dangerous because it does not look at any other indicators and because the market is prone to unexpected moves the risk is very high and unpredictable.

This strategy should only be used when the markets are quiet or very obviously ranging and it should never be used around a news event. What Are Currency Options? What Is a Trading Room? What Is Call Put Option? What is Nifty Options? Double Red Strategy This strategy is risky. It is popular with experienced traders, but beginners should avoid it.

Overview about Double Red Strategy Scalping and short term options both use small quick moves in the markets to make lots of small profits. How Double Red Strategy Works This is a short term strategy that looks at price action combined with support or resistance levels in the 5 minute chart. The Good Points The Double Red strategy is based on the 5 minute chart, so it gives the trader the chance to profit from the smaller movement in the market and very short term trades.

Summary The Double Red strategy is very high risk and very unpredictable.