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Trading Strategy “Three Steps”

At a ground level, binary options trading looks very simple and straightforward. Binary options are often considered a form of gambling rather than investment because it is advertised as requiring little or no knowledge of the markets. It is not 100% true: you definitely need to learn some basics to perform well and earn money in binary options.

The Pocket Option trading platform is famous for its functionality. It offers a huge number of tools, including the popular indicator and advisors with default settings, which will allow you to apply almost any strategy on the market of electronic contracts.

Binary options trading is good for beginners since it’s so easy to learn. There’s a very small learning curve with binary options trading. So, check out this page to understand how it works and what some terms mean then you’re good to go. What should a new trader do? Learning the basics of trading, and even more so the rules of using this or that indicator, will take a lot of time. However, all this may discourage trading altogether.

Fortunately, the market of electronic contracts is the most accessible among financial exchanges. Given the fact that here it is enough to correctly determine only the direction of the price, there are systems that do not require from a novice trader a deep knowledge of the specifics of financial markets. Let us discuss the strategy with “three steps” and explain why having a strategy gives you an advantage over the traders with no strategy.

Learn more about the strategy based on three steps

It would be a mistake to say that you do not need any knowledge at all to trade. You definitely need to read, learn and trade before you become an expert. However, you can understand basics in 10 minutes if you have some mathematical background and general understanding how trading works. Let us start with setting up Japanese candlesticks chart. It is the best option for beginners. What is a Japanese candlestick? A Japanese candlestick is a type of price chart that shows the opening, closing, high and low price points for each given period. It was invented by Japanese rice merchants’ centuries ago, and popularised among Western traders by a broker called Steve Nison in the 1990s.

Japanese candlestick chart helps traders understand and predict the trends on the market. Now, you need to remember the following:

  1. Each candle has its own “lifetime”, so called a timeframe. For example, if it is equal to 5 minutes, then the candle on the chart will be formed for exactly 5 minutes, and then the next one will appear.
  2. There are ascending and descending candlesticks. As a rule, the former is displayed green in various trading platforms, and the latter are red. However, if there is no color reference, it is very easy to determine the characteristic of the candle: if the rectangle opened at a certain level, and then completed its formation above it, it is an ascending candle. And vice versa.

As a matter of fact, now you learn enough to start trading with signals from the “Three Steps” strategy.

One last step is to choose an asset and trading time. It is recommended to use high volatility currency pairs EUR/USD or GBP/USD as assets. As for the trading time, it is preferable to trade during the European session.

How to trade with Three Step Strategy

Now, it is time to put the skills into practice. Many experts believe that impulse price movement in financial markets has “inertia”. In other words, if several candles of the same direction were formed, there is a high probability that the next one will be similar. On this basis, the creators of the strategy “Three Steps” recommend:

  • Buy option CALL after you see three ascending candles;

  • Buy an option PUT after three descending.

The expiration time depends on the timeframe you have chosen. If it is M5, the contract validity time should be 5 minutes.

In conclusion, we want to emphasize the fact that the three-step strategy is created for beginners and it does not use confirming signals from technical instruments. Therefore, to reduce risks, do not use more than 2% of your total deposit in a deal. Binary options trading provides a lucrative investment opportunity with advantages, such as high returns on investments, easy access to trading, flexibility in trading options, many available underlying assets, and risk management through predetermined payouts.

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