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Guide To Trading Using Price Action and Candlesticks On IQ Option

This document provides a guide to trading using price action and candlesticks on the IQ Option platform. It describes how to analyze candlestick colors and wait for solid candles to determine entry points. It also explains how to identify price ranges and breakouts to anticipate price movement. Examples are given of entering buy and sell positions based on these techniques. The document stresses the importance of testing strategies, following rules, and not relying on gut feelings to be successful when trading using these technical analysis methods.

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Tathego Gomolemo
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1K views

Guide To Trading Using Price Action and Candlesticks On IQ Option

This document provides a guide to trading using price action and candlesticks on the IQ Option platform. It describes how to analyze candlestick colors and wait for solid candles to determine entry points. It also explains how to identify price ranges and breakouts to anticipate price movement. Examples are given of entering buy and sell positions based on these techniques. The document stresses the importance of testing strategies, following rules, and not relying on gut feelings to be successful when trading using these technical analysis methods.

Uploaded by

Tathego Gomolemo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Guide to Trading Using Price Action and Candlesticks on

IQ Option

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Over the past couple of months, I've received emails from traders wanting to know just how to
trade based on price action. Other traders wanted to know how they can trade based on
candlesticks only.

Both questions intrigued me. Essentially, both methods won't require the use of indicators. You
simply need to study the charts and observe how price is moving. So I decided to write a guide
detailing how you can trade using both methods.

2 trading methods you can use to trade on the IQ Option platform


Trading using candlesticks on the IQ Option platform

Trading using candlesticks is quite simple. The only thing to remember is the candle color. If it's
green, it means that the bulls are dominating the markets and it's a signal to enter a buy
position. If the candle is orange, the bears are dominating the market and it's a signal to enter
into a sell position.

However, the major problem lies in where exactly to enter into a position. I recommend you wait
until one candle ends and another starts. Never enter a trade when a candle is developed
halfway. In addition, your goal is to look for solid candles (not special candles). The reason for
this is that special candles with long wicks develop in times when there's extremely high
volatility. The price going against you by the time your trade expires is very likely at these times.

Let's look at an example.

If you're trading on the IQ Option platform, you can trade either options or digital options. In my
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examples, I'll use digital options.

Set your chart to have 5 minute interval candles. That is, each candle will last 5 minutes before
the next one starts developing.

Now, wait until a candle completely develops. I prefer waiting for a candle to start developing at
a minute that's divisible by 5. For example, I waited until the time was 9.55am before entering
my position. Then I set the trade expiry at 10.00am.
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Judging by the candle that had developed prior to the 9.55am point (orange), I predicted that
the price was going to drop. So I entered a sell position lasting 5 minutes.

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When trading using candlesticks, you don't have to worry about price. All you need to look at is
the candle color. However, you'll also need to take into account the previous two or more
candles. This strategy works quite well when there's an apparent trend. For example, if there
are long consecutive orange candles, you can expect that more orange candles will develop
along the downtrend.

Trading using price action on IQ Option

Price action trading involves looking at the direction the price is taking at a particular moment.
Your goal is to determine whether the price will be higher or lower by the time your trade
position expires.

In this example, I'm still trading digital options IQ Option.

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The first thing to do is look at the price chart. In the example below, you'll notice that I created a
resistance level (blue line) which the price bounced off. This created a consolidation range. I
expected the price to start rising immediately it broke out of this range. It did and an uptrend
developed. As the prices continued rising, I entered a 5 minute buy position because I expected
the price to continue going up.

Generally, trading price action requires you first identify a specific price range (support or
resistance). Then, determine whether the prices will rise or fall below this range when a
breakout occurs. Once the breakout happens, all you need to do is enter a buy or sell position.

The interesting thing about trading on IQ Option is that entering a 5 minute trade doesn't
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necessarily mean that your position will be held for 5 minutes exactly. In my trade, I actually
entered position at 14.06pm and the trade expired at 14.10pm.

When trading with price action, you need to act fast. You therefore need to continuously analyze
price movements over a period of time before trade entry. The good thing is that, once you've
identified a good entry point, it becomes really easy to make winning trades.

Never trade with your gut


Trading using both candles and price action requires a specific set of conditions. For example,
with candlesticks, you should only trade when an apparent trend appears and candles have
large bodies.

This requires patience and proper chart analysis.


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Never try to trade with gut feeling. This is simply relying on luck. And in the financial world, luck
never makes anyone wealthy.

Whichever trading method you choose, remember to always follow the rules. Both might seem
very simple at a glance. But if applied incorrectly, you could end up losing tons of money.

Be sure to test the candlesticks and price action trading methods I've explained in your IQ
Option practice account. It might take time to grasp each method fully but once you get it,
trading will be simpler and more profitable in the long run.

Good luck!

Need help with trading?

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Read the original article at:
https://www.iqoptionwiki.com/price-action-and-candlesticks-at-iq-option/

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