Although it’s been around for a while, market geometry is still a perfectly viable way of performing technical analysis. If you don’t use or simply don’t have access to a big number of trading tools, this technique can be of big help to you when trading binary options. We will go through it in the rest of this article to give you an idea of how the whole thing works, but don’t worry – it’s all pretty simple. Therefore, mastering this technique can be especially beneficial to you if you’re still a relatively new and inexperienced trader. That way you can open up a very simple path to making a profitable prediction. Let’s get going!
Market Geometry | Main Idea
The main idea of market geometry is that past behavior will always have a strong influence on future market movements. As a matter of fact, the premise is so strong that this technique simply translates things from the left side of your Chart to the right. The main goal of this is to find reliable consolidation areas and project them into the future in order to get a clear idea about a price’s support and resistance levels. Just keep in mind that these levels do not necessarily have to form a straight line, but can also be dynamic, even from a geometrical perspective. So the main principle of market geometry is fairly easy to understand. Let’s now see how it works in practice and how you can trade by using it. Stay with us!
Market Geometry | How it’s used
Market geometry is often used for translating patterns from one side of your chart to the other because it gives you a very accurate idea of what Expiry Time you should choose when opening a trade. Additionally, it is very popular to use pitchforks in combination with this principle. You first choose the pivot point and a high and low that come after it. Then you draw three parallel trendlines through those points, with the line going through the pivot point serving as the median line to which the price should gravitate approximately 80% of the time. The other two are your support and resistance levels, respectively. When the price moves from the median line and towards one of the other two, that’s the signal you want to start buying call or put options, depending on the direction of the move.
Market Geometry | Conclusion
The main principle of market geometry is fairly simple – the gist of it is that you can translate the situation from one side of your chart to the other because the market often goes through the same cycles. This then helps you predict market developments, especially if you’re looking for information on the expiration time you should choose. Additionally, combining pitchforks with this principle is also very popular among traders and can bring you accurate information, so investing some time into mastering that tool could be a good idea. Of course, if you want to learn more about trading binary options, more articles like this are available right here on this website.