Flag for binary options
Review Binary Trading Using the Flag Pattern Many traders use the flag pattern as a signal to trade a touch option, as once a flag is complete, prices will generally move at about the same rate for around the same amount of distance as before the creation of the flag. This is a clear indication that a touch option should be traded as long as one can be found with a suitably long expiration time and an appropriate target price. Although this trading strategy may be considered to be somewhat risk as there are other factors that could influence movement following completion of the flag, a touch option results in a good payout, with the chance of winning an adequately high percentage of trades to ensure a good profit.
How to Trade the Flag Pattern Effectively The flag can also be traded in the same way as other continuation patterns.
It is also possible to use the lower and upper resistance levels of the flag in its early stages to trade no touch options with target prices outside the flag, using the prediction that prices will turn once resistance is reached. In the case of an uptrend, lower resistance levels are flag for binary options the near side, while in downward trends, the near side will be the upper resistance level.
It is important to note that a flag pattern is a rare finding, with limited opportunities for trading.
To take advantage of it, traders need to monitor several time frames and assets in order to find the best trading opportunity. As flags are formed following either a steep decline or incline in prices, they are more likely to be seen in short time frames and they will probably be spotted in either an hourly chart, or an even smaller one.
Over larger time frames, prices tend to move quite smoothly which renders flags tricky to find.
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