The Basic CandleStick Pattern for Binary Options

THE BASIC CANDLESTICK PATTERNS

1. Long Day

This is a candlestick that has a body with a very long range and a very small shadow.

Long day candlestick

2. Short Day

This is a small candlestick that has a body that is square or almost square. The
shadows are small.

short day candlestick

3. Marubozu

This is a candlestick that has one or both body extremes without a shadow. They
are reversal or continuation patterns. They are more significant when both of their
extremes have no shadows.

marubozu candlestick

4. Doji

This is a candlestick that has its open and close at the same level. This means
indecision. The market is thinking about its next move.

doji candlestick

5. Turning Top (Koma)

This is a small body that has two shadows larger than the body. It means indecision.

turning top candlestick

6. Rising Star

This is a small body with a gap above or below a long day: a turning point pattern.
It shows indecision.

raising star candlesticks

7. Parasol

This is a reversal pattern: the hammer and the hanged man. Both belong to this
same pattern.

parasol candlesticks

TURNING POINT PATTERNS

1. The Black Cloud That Covers (Kabuse)

Bearish. The second day (in black) closes below the mid-range of the preceding day.

the black cloud that cover candlesticks

2. The Morning Star and Evening Star

There is a gap in each between the central figure and the ones at the sides.

morning star, evening star candlesticks

3. The Doji Morning and Evening Stars

There must be a gap between the Doji and its adjacent candlesticks.

doji evening and moring star

4. The Three White Soldiers

Very bullish. It means the downtrend is over.

three white soldiers5. The Three Black Crows (Sanba Garasu) and The Three Identical Black Crows (Doji Sanba Garasu)

Bearish. In the second example, the opening is around the close of the preceding day for the two last candlesticks of this pattern.

three black cows

6. The Kicker (Keri Ashi)

Two Marubozus with a gap between them:

(a) bullish: black followed by an ascending white;
(b) bearish: white followed by a descending black.

the kicker candlesticks

CONTINUATION PATTERNS

1. Three Descending Methods

These correspond to the three rests of Sakata in Sokyu Honma’s method. The
corrective candlesticks can be any color, but in the direction of the trend, the
candlestick before the correction and the one after the correction must have the
color of the main trend – in this case white, since it is a bullish pattern. The ‘three
descending methods’ is the first pattern below a downward correction within an
upward trend. See diagram (a) below.

desending methods

2. Three Ascending Methods

This corresponds to the second pattern shown above. We have an upward correction
within a downward trend. It is the opposite of the ‘three descending methods.’
The candlestick before the correction takes place, and the one that reverses and
continues the downward trend are black and in the direction of the main trend.
We now have the main elements of our trading method: the ten rules of Sokyu
Honma and our key candlestick patterns. See diagram (b) above.

Candlestick pattern is probably the most effective way to trade Binary Options. With trading Binary Options, we strongly recommend three brokers: Banc de Binary, 24Option and StockPair. For more information, read reviews on the homepage!

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Author: David Wilson