Candle Doji Key to Binary Options Reversal Strategies

Before the pin bar and inside the bar, there is a doji pattern that is widely considered to be the most frequent candle formation that is easily recognizable. Although not as popular as pin bar strategies, trading methods with doji are actually no less useful. In fact, relying on doji can be more beneficial for novice traders because the formation is more easily recognized.

Although this doji formation is said to appear frequently, it does not mean that the appearance means nothing. Candlestick believers must know if every part of the candle and its various patterns can be used to read market conditions. With its "unique" appearance, the doji is able to tell the market conditions that are consolidating. The characteristics of a doji that has a very small body candle is certainly not without cause.

The pattern was formed because prices open and close at very close or even the same level. The situation is considered a sign of bullish and bearish sentiment in a balanced state. But unfortunately, it has been widely explained that the doji only shows market consolidation. There is no definitive clue whether the possibility of reversal or continuation can be identified from the doji candlestick. Occasionally, traders are advised to wait until the next candle to confirm a doji signal. This could be one of the reasons why pin bars are more popular than doji.

 With almost the same candle shape, the pin bar can be further divided into bullish and bearish pin bars to estimate the direction of the next price. Meanwhile, the appearance of the doji tends not to be able to give a definite signal about the possibility of further price movements. Despite these shortcomings, doji can still be used as a reliable price action analysis tool. In fact, this candle pattern can also be used to complement binary options trading strategies, especially methods that focus on finding reversal opportunities. Doji in Binary Options Reversal Strategy Many sources of information about binary options agree that trading strategies with doji must pay attention to certain conditions such as the length of the shadow candle, trends and price levels. Why is that? Apparently, experts in binary options have sharpened the doji function as a reversal marker.

1. Long Shadow and Doji Formation

The size of the candle becomes a major component in determining the validity of a doji as a reversal signal. The smaller the doji's body and the longer the shadow, the better the indication.

2. Trends That Precede Doji

 The stronger the price trend formed before the doji, the greater the possibility of a reversal that will occur. Observe whether the previous price has moved within a clear uptrend or downtrend.

3. Doji Position at Important Level

Price movements at important levels are often translated as crucial moments to take steps. Likewise, the appearance of the doji formation.