Monday, February 8, 2016

Titan Trade: Three White Soldiers or how to Track Market Movement From Bear to Bull

Learn Three white soldiers with Titan Trade

Binary options trading is not difficult to master, but the fact remains that the best options traders always use a combination of technical and fundamental analysis techniques to determine the optimal asset types and trading time periods for each transaction. These techniques vary widely from trader to trader, but most traders can readily identify whether they feel more comfortable trading in foreign exchange, stocks or commodities. Deciding which assets to trade is an important, but small, aspect of binary options trading.

More important than this is learning to read investor behavior and the direction of the market. This technical analysis can lead investors to easy money and simplify the trading process -- reading asset activity is more difficult than reading the market, and in a process as simplistic as binary options trading, being able to predict the behavior of other investors is often the only skill necessary for success.

Candlestick Charts

Market trends are often determined by analysis of candlestick charts. These charts track trading activity and price movements that take place within certain security, derivative or currency exchange markets. Each day of trading is usually represented as a single "candlestick," so that a month of trading is represented by 30 individual candlesticks on the chart. In this way, candlestick charts are capable of tracking price movements across time, as well as movements within a single day. Traders typically analyze these charts to gain access to information detailing the open, close, high and low points of one day in a particular market.

Recognizing Three White Soldiers

There are several different patterns that tell investors certain things about the market, and can be used as indicators of future market behavior. One of the most important patterns that takes place in candlestick charts is called the Three White Soldiers. The Three White Soldiers typically symbolizes a positive change in the market, meaning that the market is primed to shift from a bear market, or a market where investor confidence is down and price movement is negative, to a bull market, where investor confidence is increasing and prices trend upwards.

The Three White Soldiers are relatively easy for even novice traders to spot. They appear on the candlestick chart as an escalating staircase, with each "stair" beginning above the beginning of the previous stair and finishing above the previous stair's top point. This represents a simultaneous increase of the open and the close for a particular market, and can be taken to symbolize an improvement in market sentiment.

Safeguards and Analyst Confidence

Several safeguards are built into the Three White Soldiers investment philosophy to protect against incorrect analysis. The three-day waiting period ensures that over-eager traders do not take anomalous market activity as financial law. Three straight days of trading price improvement generally symbolize a true shift rather than an anomaly, whereas one day of improvement tells investors little about overall sentiment. Savvy investors also look for all three "steps" to begin at the middle point of the previous step. A lower start point could symbolize an insignificant price movement, whereas an excessively high start point could represent an artificial price correction due to other factors in the market besides investor activity.

Use Technical Analysis, but not ONLY Technical Analysis

Although technical analysis is an essential part of understanding the mechanics of binary options trading, there are several other variables to consider before making a large financial investment or trade. Binary options trading platforms such as Titan Trade provide traders with many different resources to peruse, and also often provide for one on one consultation with trading experts and professional brokers. Titan Trade also provides free online educational tools so that traders can improve their financial market knowledge without having to sacrifice valuable trading time or personal resources. Beginner traders should absolutely attempt to simplify the trading process for themselves, but understanding market mechanics and trading patterns is the quickest way to accumulate successful trades and meaningful wealth.

Three White Soldiers: Summary

Three White Soldiers is not intended to be an infallible price movement indicator, but is merely a pattern that should not be ignored. Candlestick chart experts agree that the Three White Soldiers rarely are a false indicator, and indeed many who study market timing assert that traders cannot afford to ignore the soldiers. Market sentiment changes so rapidly that investors who hesitate lose valuable opportunities to acquire certain assets and rid themselves of others. The quicker a trader can analyze the market, the more time they have to decide what the proper decision should be.

Along with keeping a diversified portfolio and studying asset price trends, responding assertively to market movements is a key part of stock market success. Familiarizing yourself with patterns like the Three White Soldiers will lead to more success on online platforms like Titan Trade, and hopefully to a steady increase of investment funds.

The article is written by Nick James, a Forex trading enthusiast. Ask him a question on Quora or stalk him on twitter.