The kicker strategy is a chart interpretation method that looks for a price divergence in between trading sessions, or candlesticks, depending on the timeframes that you will be trading. It is a pattern that appears from time to time on price charts, and it is an indication that you should take out a put binary option on the asset that you are looking at. Let’s take a look at how to use this trading strategy, and what things to look out for.
Application of the Kicker
The kicker strategy consists of a pair of candlestick markings. The first is at the top of a chart, or just past the peak of a run on a resistance point. It is a positive candlestick. The second is directly after it, and is a negative one. This in itself isn’t unusual, though. The thing that separates the kicker is that there is a noticeable gap in space between the two candlesticks. This indicates a big change between the price and the trader sentiment, and is usually indicative of further drops in price.
The trick to using the kicker correctly is to remember that because prices do not change quickly enough with most assets to warrant using this with a 60 second price chart, it can still be used on 60 second binary options. You need to go upward in timeframes for your charts, though. Going with a 5 or even a 15-minute chart is the best way to do this, especially as over these timeframes, prices can change quickly enough for the kicker pattern to occur. Once you see it in your chart, taking out a put option is the best way to capitalize on this. Acting quickly is an absolute must here, especially if you want this method to work more than once on the same occasion. Be sure that you stop trading once the sentiment returns to a positive one again.
You can use this method on other timeframes than 60 second binary options, but you need to be sure that you are reading the right timeframes on your price charts in relation to the expiry that you will be focusing on. For example, if you are taking out a 15-minute expiry on an asset, then you should be looking at a price chart with 30 minute indicators. As a general rule, you should be using a step or two up from the expiration time that you are trading. If you go out too far in timeframe, though, you fall at the mercy of market changes, so it’s best not to go out more than 30 minutes in time while using the kicker. Even this can be pushing it, so you will find that you are going to be at your most profitable when you stick with expiries between 60 seconds and 15 minutes.
You Do Have Some Drawbacks
As with any trading strategy, there are some drawbacks to using the kicker strategy. For one, it relies on visual interpretation of candlestick charts, and this leaves room for error. And because it’s a charting visualization, it doesn’t take into account fundamental action or upcoming sentiment or news events. For this reason, the kicker on its own isn’t as accurate as many other strategies when it is used on its own. Pairing this up with other trading strategies, such as trading the news, makes it much more accurate and profitable.
Also, you need to remember that even with perfect information, this indicator is not always accurate. Trading pattern anomalies occur from time to time, and that happens once in a while with the kicker. Overall, it is accurate more often than not, which makes it profitable when used with a decent money management strategy.
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