60-minute Binary Options Trading Strategy based on Pivot Levels and Candlestick Patterns

Written by Miroslav Marinov

Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

For this strategy we will utilize the traditional method of Pivot Point calculation and single-candlestick reversal formations, such as the Hammer and the Shooting Star. For a detailed overview of these patterns, you can check this article out, while for more information on Pivot points and the methods of calculation, you can visit this section.

Since we will examine the 15-minute time frame and the options expire within 1 hour, we will have a four-candle expiry time. For the 15-minute time frame we need to calculate the daily pivot levels for the current trading session (Asian, European, or American) based on the low, the high and the closing prices of the particular instrument in the preceding session. After we have a central pivot point, as well as three levels of support and three levels of resistance calculated (S1, S2, S3; R1, R2, R3), we need to plot them on the price chart.

Next, we begin to examine price action looking for the two particular single-candlestick formations. The Hammer will usually appear after the price has been declining and in proximity to a level of support. Because of that, it will usually signal a bullish reversal. Therefore, in order to buy a call option:

1. We need to detect a Hammer formation, which comes in contact with the daily S1 level,

2. The body of the candle following the Hammer needs to exceed the body of the Hammer itself and to close higher.

The screenshot below visualizes these trading conditions and shows where a call entry should be made and where the option expiry is.

The Shooting Star will usually appear after the price has been surging and in proximity to a level of resistance. Because of that, it will usually signal a bearish reversal. Therefore, in order to buy a put option:

1. We need to detect a Shooting Star formation, which comes in contact with the daily R1 level,

2. The body of the candle following the Shooting Star needs to exceed the body of the Shooting Star itself and to close lower.

The screenshot below visualizes these trading conditions and shows where a put entry should be made and where the option expiry is.