Today’s article will show you how to trade with this candlestick pattern in Binomo trading.
Piercing Line pattern or the Rising Sun candlestick pattern is a candlestick pattern is a signal confirming a bullish reversal and it often appears at the end of a downtrend. It is a safe condition for you to open long-term UP orders.
Structure Of The Piercing Line Pattern
This is a candlestick pattern with a similar shape to the Dark Cloud Cover pattern with the opposite structure.
First candlestick: is a red candlestick.
Second candlestick: is a green candle. Its closing price must be at least higher than ½ of the first candle. Its opening price is not necessarily lower than the first candle.
It is just like the Dark Cloud Cover candlestick pattern. By carefully observing, when pairing 2 candles of this pattern together, you will have a Hammer candlestick pattern. This is a very common reversal signal from decreasing to increasing.
In Binomo, the pattern does not appear much. However, when the price creates this candlestick pattern, it will almost reverse from down to up. This is the time to focus on opening UP orders to increase profits.
Trading Strategies Using Piercing Pattern
It is similar to the Dark Cloud Cover. This pattern is also used as a reversal signal. Combining it with other indicators or signals gives perfect entry points when trading in Binomo. Let’s look at the some common strategies using this pattern.
- A 5-minute Japanese candlestick chart.
- Open orders with an expiration time of 15 minutes or more to avoid small price movements.
Strategy 1: Combined With RSI Indicator
RSI is always one of the best indicators of market sentiment. The
price is very likely to reverse from bearish to bullish when the pattern appears and RSI is in
the oversold zone.
Open an UP order = RSI is in the oversold zone + Piercing Pattern.
Strategy 2: Combined With Bollinger Bands
The Bollinger Bands (20; 2) is a price fluctuation range with very accurate forecasts when the price breaks out of these bands. In this strategy, If the price falls off the lower band of the Bollinger Bands and creates the Piercing Pattern, we will take action.
Open an UP order = the price falls off the lower band of the Bollinger Bands + Piercing Pattern.
You were presented with another reversal candlestick pattern. You can try it today on a demo account to better understand. In the future, there will be specific articles on advanced trading strategies around the Piercing Line Pattern.