Modern financial markets (including stock markets) are not stable and resilient, so no matter what tools you use for investing and trading binary options , the situation can change at any moment, puzzling you with a sharp turn of events. But there are some patterns of binary options that help determine the most likely outcome of price movements in the future.
The main weapon of a successful trader is competent market analysis. Asset volatility can be predicted if you know how to use binary options indicators and strategies, and also take into account the economic situation in the country and in the world, as they can influence the situation.
Please note that chaos, disorder and unpredictability of price movements are mainly complained about by those traders who have either only recently started trading in financial markets, or those who do not understand the specifics of trading and do not know what to pay attention to in order to determine the future direction.
Are there patterns in binary options?
Despite the great desire of any trader or investor, it is impossible to fully understand the binary options market, so during trading you should always keep in mind that the dynamics of price fluctuations can lead you to bewilderment at the most inopportune moment of time.
Today on the Internet you can find an innumerable variety of strategies, trading systems and theoretical calculations that guarantee the trader a stable income thanks to the laws of binary options. However, if you look more closely, all the proposed models promise a profitability of 60-70% at best, but not 100%, since such systems simply do not exist. The exception is the so-called “Grail” for binary options , which promise anyone earnings of 100% or more due to market patterns that the author of the product knows. But almost always this is just one type of fraud in binary options , which, instead of “overclocking” the deposit, will help “drain” the trading account .
Many newbies may ask questions like these:
- Why is it impossible to determine the direction of market movement with 100% certainty?
- Is each price movement evidence that quotes are changing chaotically?
- Are there patterns in binary options that allow you to predict every market move?
Any of these questions can be easily answered like this: the binary options market is not a set of template actions that you can learn and start making money. The price of an asset moves thanks to each trader who contributes to the state of affairs in the market, and not all binary options traders and investors react the same way to the same situation. But despite this, thanks to all market participants, almost all price fluctuations move according to certain patterns and there is a certain logic and consistency in them, on which strategies that bring regular profits to market participants are based.
Next, we will look at some patterns of binary options and also touch a little on the stock market (you can also buy options on them), after which it will become a little clearer what you should watch in order to understand what will happen to the market in the future.
Binary options pattern #1: trend
The trend in the market may not be called a stable pattern in binary options, but it is still very important and the outcome of the transaction very often depends on it.
Trends can be different, but in any of the options it is always a unidirectional price movement in one of the directions:
| Uptrend | Downtrend | Sideways trend (flat) |
 |  |  |
You can also learn more about the trend from articles such as:
A trend can be considered a pattern for binary options for the reason that all markets work the same way, and the market can never be in the same state for a long time. Therefore, if, after analysis, a trader sees and understands that the trend has changed and, for example, began to go down, then the pattern will be pullbacks against the trend followed by a continuation of the fall:
Please note that it is not necessary to buy the option at the very peak. It is enough to buy it on a pullback with sufficient expiration, and if the trend does not change, then with a very high probability you will make a profit from trading binary options. Exactly the same algorithm of actions can be attributed to an upward trend.
The pattern of binary options in a flat works differently, and all you need to do is simply buy options from the border, that is, at the moment the price approaches one of the borders. In this case, it will also be important to choose the right expiration, but this can only be done after testing this approach on a demo account :
Binary Options Pattern No. 2: Technical Figures and Chart Patterns
One of the most famous and simple patterns of binary options is graphical analysis , which allows you to study graphic patterns. These figures can tell you what the market situation is expected to be in the future.
Graphic figures are repeatedly repeated patterns on the chart, the formation of which allows us to make assumptions about the further direction of price movement. There are quite a few different graphic shapes, such as pennant, flag, triple top and others, but we will next look at the most effective and simple ones. These include:
- Triangle;
- Double top/double bottom;
- Head and shoulders.
Triangle
The triangle is a universal pattern that is often used by traders in binary options trading. It comes in different types (which is not important, since the essence of the movement does not change) and this binary options pattern looks like this:
| Triangles for a bull market | Triangles for a bear market |
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On a graph it might look like this:
From the examples above you can see that everything is extremely simple. After the price breaks through the pattern boundary, a surge in volatility occurs in one direction or another. For binary options, the duration of the price movement does not matter, since one point is enough for us to make a profit. Therefore, we open a position directly at the breakout point, and this gives a great chance of successfully completing the transaction.
You can use the triangle on different timeframes and different expiration periods .
What is the reason why this pattern appears on the chart? The formation of a triangle is formed due to the collision of “bulls” and “bears”, and some believe that the price will go higher and buy the asset, while others believe that the price will go lower and therefore sell the asset. You can never say for sure which force will prevail, but after the breakout it becomes obvious, and if the price breaks the triangle upward, then the “bulls” have won, and if downward, then the “bears” have won.
Double top/double bottom
Double tops and double bottoms are also very popular patterns that indicate a trend reversal or at least a short-term reversal. This figure looks very simple:
On the chart, this figure will not always be ideal, but this does not change its essence:
A double top is formed because the bulls are not strong enough to go higher, and the bears ultimately win. In the case of a double day, on the contrary, the “bears” are weaker and the “bulls” win.
Also, this figure can sometimes turn from a double top/bottom into a triple one, but the principle of binary options trading with it does not change, and you need to wait for a breakout.
Head and shoulders
It is safe to say that this figure is unknown only to those traders who only yesterday learned about binary options trading. This pattern may visually resemble a triple top or bottom, but the difference is that the middle top is always higher or lower than the other two:
On a chart, this figure may look like this:
Please note that very often a rollback to the neck line can form after a breakout, and sometimes a breakout of the border in the opposite direction. Therefore, you can use not only breakouts, but also rollbacks in trading.
Binary Options Pattern #3: Price Action
Also, another method of trading binary options related to patterns is Price Action , which differs from the previous method in that patterns are built not by figures, but by candles.
There are a lot of patterns in Price Action, so we will consider only the two most popular and at the same time the most effective. These include Pinbar and Absorption.
A pinbar is always a bar with a long shadow on one side and a small candle body. Absorption is a candle that is larger in size (body) than the previous one, so it seems that it is blocking it (absorbing):
| "Pinbar" | "Absorption" |
 |  |
On the chart, such binary options patterns look like this:
The main thing to understand is that you should not immediately make a trade as soon as such patterns appear. They work best along a trend and in conjunction with other confirmations or signals.
Binary Options Pattern #4: Abandoned Stocks
This pattern of binary options was initially noticed by stock market traders and was successfully used when making transactions. As binary options trading developed, it became clear that this approach can also be applied when trading options.
The point is that from time to time new organizations and enterprises enter the market, whose securities do not arouse much interest among investors. The same thing happens with well-known companies that have been on the market for a long time.
The lack of demand for such shares and bonds leads to their quotes falling significantly. Unclaimed securities can be purchased very cheaply, and in the future, interest in such assets can increase significantly, which will lead to a significant increase in their value. By purchasing stock options at this stage, the trader will make a good profit.
For example, you can consider the chart of shares of HP (Hewlett Packard), which are very often undervalued, which is clearly visible on the daily chart:
You can see that in the marked places the price continued to fall, after which a strong growth began. But it is worth understanding that this is a daily chart and to conclude that there is no demand, it is necessary to use both technical analysis and fundamental analysis .
Thus, if you discover unclaimed shares in a timely manner, you can buy a binary option whose price corresponds to the low stock quotes. A dynamic decline usually lasts from one week to a month, and it is important for a trader not to miss this time.
It is worth understanding that not all brokers provide the opportunity to trade shares of American companies, so you can find a broker with shares in our rating of binary options brokers . If we talk about HP shares, then they are available at the binary options broker Pocket Option .
Binary Options Pattern #5: Trading Sessions
The question of the dependence of market behavior on the time of trading sessions is closed, since such a pattern exists in binary options. As a result of many years of observations, a certain trend has been noticed, which many traders take into account in their trading. Knowing this, you can also use it in practice.
The most active trading time is the American session, which opens at 16:00 Moscow time. At this time, the price very often exhibits powerful dynamics and often moves steadily in a certain direction. The opening of Europe (11:00 Moscow time) is also considered a very active time (albeit inferior in volatility). At this moment, one can also observe a revival in the market, especially in currency pairs . The likelihood of strong market fluctuations at other times is lower, but of course there are exceptions. The opening times of each session can be seen below:
Frankly speaking, this rule is not easy to use in market trading. But inexorable statistics indicate that if on Friday the asset’s quotes showed a serious increase or decrease, then with a high degree of probability on Monday they will continue to move in the same direction.
Binary options pattern No. 6: news and its impact on prices
One of the fastest ways to make a profit in the binary options market is news trading. But you should understand that the probability of receiving a loss is also high.
The essence of trading binary options on news is to buy an option a few minutes before the release of important news. The pattern in this case is that you can almost always observe a significant increase in prices, which occurs after the release of positive news, and in the case of negative data, the price, on the contrary, begins to actively fall.
Regardless of the news, this is always a good time to place a bet, especially if you prefer turbo options or just active trading. But it is important to remember that the pattern of strong movement in binary options is only strong news, which is indicated by three stars. You can find such news and data on them in the economic calendar :
Binary Options Pattern #7: Markets are always most active in January and December
One of the simplest patterns in binary options is that at the beginning of the year (especially in January), most large trading participants tend to close positions from which they do not expect significant profits. Therefore, January is a month when private traders have an excellent opportunity to observe important price changes in the market.
Most often, at the beginning of each year, you can observe strong reversals even when there was a strong unidirectional trend before. Particular attention should be paid to January 1-10, and if you look at history, you will be convinced that this is a pattern.
For example, you can look at the daily chart of EUR/USD:
Experienced traders tend to believe that January determines the direction of the market during the first three months (first quarter). Thus, if the quotes of a traded asset fall in January, the decline will continue in the future. But, of course, there are exceptions.
December also has its impact on the markets, but the nature of this binary options pattern is different - many traders want to make money before the new year, and therefore the markets are more active.
It can be difficult to predict movements this month, but this is compensated by high volatility, which allows you to make money even on fast trades.
What conclusions can be drawn from all this?
The patterns of binary options discussed in this article take place and appear with good frequency. The listed patterns should not be considered as a call to action. Rather, they should be taken into account in order to gain a deeper understanding of market trends when dealing with a particular financial instrument over a certain period of time.
By correctly using the information you have read, you will be able to profitably use your capital by trading on the market. But you should open a position only when your trading system sends an accurate signal that is consistent with the listed market patterns.
See also:
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