The Confirming Entry – Forex Binary Options
Almost every single day endless counts of setups occur on multiple different assets across the board. The lower the time frame the more candle formations, candle patterns and support & resistance zones we tend to see setting up. A lot of traders get completely sucked into this way of trading binary options, burning their precious time and energy on what is referred to as ‘market noise‘.¹ It is said that the higher time frame candles/bars produce a higher overall entry signal accuracy than the lower time frames. This is without a doubt a highly debated topic, not only in the Forex industry, but binary as well. Based on my own experience it comes down to one thing and one thing only. Find out what works best for you, and stick to it. In combination with your selected time frame one needs ‘confirmation‘ before executing their trade! As mentioned in my previous article, The Two Most Profitable Trade Options, confluence is the icing on the cake.² This is arguably the main cause for a low in-the-money accuracy, induced by greed and fear of missing trades that should have been set aside in the first place. Once again this proofs that quality always outweighs quantity when it comes to the financial markets.
1. Investopedia explains ‘Noise’
In general, the shorter the time frame, the more difficult it is to separate the meaningful market movements from the noise.
2. Trading ‘Confluence’ explained
In trading confluence is the overall agreement of different factors indicating that the exact same ‘directional movement’ is most likely to occur.
What Is The Confirmation Execution
Over the past few years I have had endless questions regarding the above mentioned topic, asked in many different ways, yet coming down to the exact same thing – Confirmation and Confluence.
- How can I be confident in my trading decisions?
- Which factors make the setup valid?
- What is the strongest and most accurate entry signal?
- Should I wait for confirmation before placing my trade?
- How many factors should indicate the same direction?
The list goes on and on…
As I mentioned, confluence and confirmation go hand in hand when executing your binary options trade. Lets take a look at a video example that would better explain my point.
Video 2 will be related to binary options entries although the same principal applies.
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