Piercing pattern – how to identify and trade on Binomo

Piercing pattern – how to identify and trade on Binomo
Piercing pattern – how to identify and trade on Binomo

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.

Signal confirming a bullish reversal and it often appears at the end of a downtrend on Binomo
Signal confirming a bullish reversal and it often appears at the end of a downtrend on Binomo

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.

Structure Of The Piercing Line Pattern on Binomo
Structure Of The Piercing Line Pattern on Binomo

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.

Very common reversal signal from decreasing to increasing on Binomo
Very common reversal signal from decreasing to increasing on Binomo

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.

Time to focus on opening UP orders to increase profits on Binomo
Time to focus on opening UP orders to increase profits on Binomo

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.

Requirements:

  1. A 5-minute Japanese candlestick chart.
  2. 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 1: Combined With RSI Indicator on Binomo
Strategy 1: Combined With RSI Indicator on Binomo

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.

Formula:

Open an UP order = the price falls off the lower band of the Bollinger Bands + Piercing Pattern.

Strategy 2: Combined With Bollinger Bands on Binomo
Strategy 2: Combined With Bollinger Bands on Binomo

Conclusion

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.

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