Posted by on April 20, 2014

Many traders not unlike myself often find ourselves picking up trades which are against the trend. While often these can be phenomenal trades as the markets are not always trending, the inevitable “waterfall” scenario will eventually occur. The “waterfall” scenario is one in which a streak of green or red candles happen all in a row and the trader keeps following it for reversal trades. My experience with these suggests that these candles can range anywhere from 5 to over 20+ candles in length before turning around.

Here are two example screenshots from my charts on EUR/GBP and AUD/JPY so that you can familiarize yourself more with what a “waterfall” scenario looks like.

eurgbp 202x300 Avoiding The Inevitable Waterfall Trade Scenario audjpy 229x300 Avoiding The Inevitable Waterfall Trade Scenario

As you can see in the EUR/GBP chart that we have 8 green candles in a row, followed by a single red and then continuing another 4 green. Similarly in the AUD/JPY we have 7 red candles in a row, followed by a small nearly doji green candle and then 5 more red candles in a row.

Is it possible to predict when these are going to happen?

The honest answer is that we as traders cannot always predict when this scenario is going to happen. The market can easily start trending hard during news announcements, however they can also happen at random times during the day without any news. We simply need to be ready to STOP, and sit on our hands, and wait until the market resumes prime reversal trading opportunities.

If we cannot predict these, how can one help ensure that they do not get stuck in any of these types of trades if they are a reversal trader?

Over the past few years I’ve found myself constantly on the lookout for 5 or more candles in a row and immediately stopping any further reversal trades. It’s certainly hard when you see 7 candles in a row and you believe that the probability that the market will turn around is so much greater, however it’s still not very safe. We still at this point will have no idea where it is likely to end and turn around, it could easily go another 10 bars in a row. So, until we find that the trend has likely stopped as you will see below, we need to sit out and be patient. There is no point in executing further reversal trades against a heavy trend with the likely hood of further losses being so great.

How do we know when the “waterfall” has likely ended?

What I look for after a waterfall trade setup with 5+ bars in a row is the breaking of previous red bars and closing above previous red bars. Once I see this begin to unfold, I am often ready to get back in the markets. However if I do not see this type of setup helping to confirm the possible end of the trend, the likelihood of it continuing is far too great for me and any further reversal trades would likely lose.

Here is an example below of what I consider to be a perfect end of a waterfall.

usdjpy Avoiding The Inevitable Waterfall Trade Scenario

So be cautious if you are a reversal trader, start counting your bars and be ready to sit on your hands! I hope that many of you will find this article helpful, I know it would have saved me a tremendous amount of money started trading.

Posted by on March 10, 2014

A brand new video going over a new 5 to 15 minute strategy using an inside bars indicator for binary options has been posted. If you are interested, you may download the indicator as well as find all the settings and the join the discussion at http://www.binaryoptionsedge.com/index.php?/topic/255-inside-bars-indicator-based-strategy/#entry3669

I hope many of you will find it useful in your continued progression towards becoming a full time trader whether in Forex or binary options. Please let me know your thoughts on the discussion boards!

Posted by on February 23, 2014

stockpair nous Stockpair Brokerage Stops Accepting U.S. Clients As Of February 23rd, 2014

Stockpair has now stopped accepting trading clients from the United States as of today, February 23rd, 2014. The news may come to many as a surprise as they have been one of the most well liked brokerages in the industry. The platform they offered was exceptional and offered several different features than those you will see on many other platforms in terms of expiration. It is a sad day for all of us traders from the United States to see this happen, however it is understandable. The reason for this decision appears to stem from the firm trying to obtain a licence from CySEC (Cyprus Securities and Exchange Commission) which comes with the stipulation that they must halt accepting traders from the United States.

We do wish them the best of luck as they continue to become regulated and make an even better name for themselves.

Posted by on February 3, 2014

I have just made a new video which describes a little about how one can use fractals to help define support and resistance levels and trading them as breakouts. A thread has been started over at the Binary Options Edge site which can be found here http://www.binaryoptionsedge.com/index.php?/topic/226-fractals-support-resistance-strategy-video/#entry2955

Here is the video

Posted by on January 24, 2014

cysec ends CySEC Works To End Binary Options Brokers From Granting Turnover Required Bonuses To Clients

It was brought to my attention today from one of our members Mr. Alum that CySEC is now working to end binary options brokers from attaching bonuses which lock up clients funds until a turnover is reached. As they state in the announcement, “Any restrictions on the withdrawal of clients’ funds are not in compliance with the provisions of the Investment Services and Activities and Regulated Markets Law, as in force (“the Law”) and the Commission’s Directive DI144-2007-01 of 2012 for the authorisation and operating conditions of CIFs (“the Directive”).”

This is great news in my opinion for traders in binary options. I’ve gotten far too many e-mails and complaints from people who have had their funds locked up with bonus terms and conditions even if they didn’t want it or understand what was happening in the first place. I hope this finally puts and end to the bonus locks and allows for fair withdrawals.

Here is the PDF – /Circular-CI144-2014-02-to-CIFs-in-relation-to-granting-trading-benefits-to-clients.pdf

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