Binary options is simple: candle reversal pattern "Harami Cross"
- VFX Blog
- For beginners
We continue a series of articles on how to make money on binary options without a long study of technical and candlestick analysis. To do this, we will look at the price chart for candlestick reversal patterns that indicate the near start of a trend change. One of the strongest is the «Harami» model, and its version with the «Doji» candle is called the «Harami Cross».
If a normal Harami pattern refers to medium strength signals, then the appearance of a cross always requires special attention.
About candlestick analysis
The methodology was developed by the Japanese trade in rice Munehisa Homma in 1755 and has not changed significantly to date. He also found the basic candlestick patterns by which the reversal or continuation of the current price movement is determined.
In terms of technical analysis, candlesticks confirm two basic principles:
- Price (candle) includes all factors affecting it; no additional analysis is required (one of the principles of Dow Theory).
- History repeats itself and with the help of graphical patterns, it is possible to predict the actions of most stock players (Eder's Chaos Theory, Elliott's wave model).
The volume of the article will not allow us to describe in detail all the candle patterns; we well only on the simplest and at the same time strong figures. They can be used immediately even in binary option for newbie’s.
The model is equally strong at the base and at the top of the trend, and its middle name translates as “terrifying”. It is hard to say where such an association came from, but on long timeframes from H4 and higher, it is quite possible to earn up to a hundred points per trade or open several profitable options in a row. Graphically exact binary option strategy it looks as follows:
Professionals can enter the market immediately after closing the candle following the Doji, regardless of its direction. Beginners need to wait until binary option trading signals is fully formed.
Reasons for the appearance
To understand how the market crowd works in our case, let's look at the daily chart of how bearish Harami appears.