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How to Predict a reversal of Direction of Binary Option Trading Using Candlestick?

Ultimate Candlestick Bullish and Bearish Reversal Pattern

How to win the IQ option on a binary options trading?

In learning to analyze trading is actually very simple, the trader only has to know when it will happen a reversal of direction when the movement direction will continue the trend of earlier, when consolidation is going to happen (sideways) and when the time the consolidation will end.

So the trader will be confident in taking a position trading. To find out all of that trader should learn fundamental analysis and technical analysis.

Usually, binary options traders rely more on technical analysis indicators with and without an indicator. But it's also important to follow economic news release as the basis of fundamental analysis.

Analysis without indicators i.e. predict movements of price direction using candlestick charts.

Candlestick can inform the conditions that are going on in the market. To be able to analyze with candlestick you should know the candlestick patterns.

Candlestick patterns there are four, namely:
  1. Candlestick reversal Patterns
  2. Candlestick continuation Patterns
  3. Candlestick patterns consolidation
  4. Candlestick patterns post consolidation
In this article, I will discuss the candlestick reversal patterns first. Candlestick reversal patterns are also grouped into 4 levels, namely:
  • Candlestick reversal Patterns level 1
  • Candlestick reversal Patterns level 2
  • Candlestick reversal Patterns level 3
  • Candlestick reversal Patterns level 4
Previously I have explained the reversal candlestick pattern of level 1 and level 2, then it is time to discuss a reversal candlestick pattern of level 3.

10 CANDLESTICK REVERSAL PATTERN LEVEL 3


Candlestick Reversal Pattern Level 3 is the candlestick patterns that require the confirmation of the next session.
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Here are some candlestick patterns that indicate a reversal of the direction of prices will happen to be the basic binary options trading and forex:


1. BEARISH RICKSHAWMAN
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A Bearish Reversal Pattern type: Level 3

Description:
  1. Long Bullish candle with a body appears when an uptrend.
  2. The next session gap up and has a high volatility but eventually, prices closed not far from the opening price.

Psychology:

When the market is experiencing an uptrend, the next session opened with a gap up. The price got up and down quite far indicate either seller or buyer seeks to control.

But eventually, the price closed again near its opening price that indicates confusion market participants whether the trend will continue.

Note:
  • The colour of the body of the second candle is not significant.
  • If no gap up at the second candle or if the body of the second candle is at first candle then it is likely happening is that prices move sideways.

2. A BULLISH RICKSHAWMAN
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Type: Bullish Reversal Pattern Level 3

Description:
  1. a long Bearish candle with a body appears when downtrend.
  2. The next session gap down and has a high volatility but eventually, prices closed not far from the opening price.

Psychology:

When the market is undergoing a downtrend, the next session opened with a gap down. The price got up and down quite far indicate either seller or buyer seeks to control.

But eventually, the price closed again near its opening price that indicates confusion market participants whether the trend will continue.

Note:
  • The colour of the body of the second candle is not significant.
  • If no gap down at the second candle or if the body of the second candle is at first candle then it is likely happening is that prices move sideways.

3. A BEARISH BELT HOLD
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A Bearish Reversal Pattern type: Level 3

Description:

While the uptrend gap up far enough but the price immediately reversed course and closed down with a long body.

Psychology:

When the market is experiencing an uptrend and gap up far enough it should show the strong dominance of the buyer, but the price and even reverses direction and the seller which control the session.

Failure to continue the trend after a gap up far enough this can give an indication of the changing sentiment of market participants.

Note:
  • Getting a longer body, then indicate the stronger the reversal will occur
  • The greater the volume of the reliability of this pattern.

4. The BULLISH BELT HOLD
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Type: Bullish Reversal Pattern Level 3

Description:

While downtrend gap down far enough but the price immediately reversed course and closed up with a long body.

Psychology:

When the market is undergoing a downtrend and gap down far enough it should show the strong dominance of the seller, but the price and even reverses direction and the buyer that control the session.

Failure to continue the trend after a gap down far enough it may give an indication of the changing sentiment of market participants.

Note:
  • Getting a longer body, then indicate the stronger the reversal will occur
  • The greater the volume of the reliability of this pattern.

5. TWO CROWS
candlestick pattern bearish reversal

A Bearish Reversal Pattern type: Level 3

Description:
  1. long Bullish candle with a body appears when an uptrend.
  2. The next session gap up but prices closed lower so bearish candle.
  3. The next session going bearish candle with a high close to the previous candle high and closed lower than the close of the first candle so that closing the gap.

Psychology:

When the market is experiencing an uptrend and the price of not being able to make a higher high indicates the price has reached a strong resistance level.

A seller who dominated the last candle and two gaps closed successfully marked the change in market sentiment from bullish become bearish.

Note:
  • This pattern typically followed with increasing volume.

6. UPSIDE GAP TWO CROWS
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A Bearish Reversal Pattern type: Level 3

Description:
  1. long Bullish candle with a body appears when an uptrend.
  2. The next session gap up but prices closed lower so bearish candle
  3. The next session going bearish candle with a high close to the previous candle high and closed in the area of the occurrence of the gap so it hasn't closed the gap.

Psychology:

When the market is experiencing an uptrend and the price of not being able to make a higher high indicates the price has reached a strong resistance level.

A seller who dominated the last two candle indicates the dominance of buyers began to diminish.

Note:
  • This pattern typically followed with increasing volume.
  • Confirmation of the next session is required, namely, the price drops down and closes the gap.

7. the DELIBERATION
strong reversal candlestick pattern

A Bearish Reversal Pattern type: Level 3

Description:
  1. Bullish candle appears when an uptrend.
  2. The next session also bullish candle with a range that is the same or almost the same
  3. The next session gap up short with a body or a spinning top.

Psychology:

When the market is experiencing an uptrend bullish candle two and came up with the same range showing the strong buyer.

Then the existence of a gap up should give information that buyers still dominate. But in the end, the session closed with a small body that indicates market participants began to doubt that the trend will continue.

Note:
  • This pattern requires confirmation. The next session is opened flat or lower and then move down.
  • The pattern is more likely to give the signal for the onset of a correction than the occurrence of a change of sentiment.

8. ADVANCE BLOCK
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A Bearish Reversal Pattern type: Level 3

Description:
Three consecutive bullish candle appears when an uptrend with:
  1.  The range of increasingly shrinking
  2.  Opened under the previous candle close-up
  3.  the Shadow on top of getting longer

Psychology:

When the market is experiencing an uptrend bullish candle three and appeared in the sequence should indicate the dominance of buyer.

But the increasingly narrowing range suggests the momentum is starting to weaken. The increasingly long shadow at the top also showed the buyer is not able to maintain a higher high.

Note:
  • This pattern requires confirmation. The next session is opened flat or lower and then move down.
  • The pattern is more likely to give the signal for the onset of a correction than the occurrence of a change of sentiment.

9. HOMING PIGEON
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Type: Bullish Reversal Pattern Level 3

Description:
  1.  While downtrend bearish candle occurs.
  2. next Sessions happens also a bearish candle with a smaller body and is in the range of body so the first candle inside day.

Psychology:

When the market is undergoing a downtrend and appeared with a body candle is smaller and occur inside day shows the market began to lose momentum and the possibility of moving the price reverses direction.

Note:
  • Usually followed with the volume down.
  • These patterns require the confirmation of the next session, that the price rises above the high of the first candle.

10. MATCHING LOW
candlestick reversal pattern doji

Type: Bullish Reversal Pattern Level 3

Description:
  1. When are going bearish downtrend marubozu.
  2. The next session opened in the range body first candle (on at least half the body first candle) and closed at the same price of the previous session. The second candle is also ideally marubozu.

Psychology:

When the market is undergoing a downtrend there is a strong support level which is not successfully penetrated.

The inability of price to make a lower low gives an indication of the market began to lose momentum.

Note:
  • Usually followed with the volume down.
  • These patterns require the confirmation of the next session, that the price moves up above the high of the first candle.

That's some candlestick patterns that included bearish and bullish reversal pattern level 3. Don't miss out to learn too:
Hopefully the reversal candlestick pattern patterns you can use to profit consistently on a binary options trading as well as forex. Maybe useful and profit.
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13 January 2019 at 21:18

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