Binary options news strategy ichimoku clouds
Ichimoku is an indicator and there is in every platform. First of all, take a look in the first screen shot about how this indicator look like. I am working in a 5min chart. The upper line of Kumo is senkou span A and the other one the senkou span B. The blue line which look like a moving average is the Kijun and the red one the tankan. Last, the green one is the chinkou. Maybe you are confused right now but I am going to explain how this complicated thing is a very strong tool for the technical analysis.
There are many theories and trading systems around this indicator and I will tell you the basics and how I use this with volume and price action. First of all, you should know that Ichimoku works better in trending markets and If you are able to catch a trend from the beginning in financial products like Spread Bets, Spot Forex you will earn good money.
You can also use it in Binary Options but I recommend longer expiries. If the price is above the Kumo there is a bullish activity in the market and an up-trend. If the price is below the Kumo there is a bearish activity in the market and a down- trend.
Traders need to wait for the price on the chart and closely monitor its behavior. After it goes into the cloud, that is caught between Senkou Span A and Senkou Span B, it breaks one of the faces and comes out.
Everything seems a bit complicated at first but after weeks of daily trading you will probably start to see some profits. The following figure shows how the candle breaks above the upper boundary of the cloud. After that, the second candle is even higher. Call option buying is recommended immediately after the price breaks through the cloud, and the candle is fixed over it.
There is also another trading signal that would indicate the possibility of buying a Call binary option. This can be done in the case where the price, after going down is unable to break the upper limit of the cloud. In this case, it bounces off it and goes upwards. The same can be said about Put options buying as the essence of trading on the slide is exactly the same.
Traders must wait for a situation when the price will go inside the Ichimoku Cloud and locate between the two lines of the Senkou Span A and Senkou Span B. On the graph you can see how the price hits the lower limit of the Ichimoku Cloud in two places, creating a signal to buy a Put option.
In order to make the signal confirmed, it is advisable to wait until the current candle, which has broken through the clouds, closes below it. As in the case with an upward movement, in downward trend may appear situations when an interim correction is performed.
Many traders make one common mistake in cases when the price goes inside the cloud and begins to move within the boundaries that form it.
Then they begin to trade within the cloud, which is totally not recommended.