The strategy “Three touches” is very popular and came from the FOREX market. It is very simple and very reliable at the same time. This strategy allows you to open the deals either when market reverses, or trend continues.
It is known from the technical analysis that some patterns are repeating regularly, so it makes sense in the construction of graphical pattern on the chart, so to predict further asset movement.
“Three Touches” is a graphical pattern, which is not hard to find at real time chart. There is possible to find it on the chart with different timeframes and for any asset.
All we need is to draw a trend line (how to draw a support or resistance trend line you can see in this short video) with the drawing instrument from the panel.
This panel is located on the left of the chart and the only tool we need is a Trend Line. After pressing the pictogram, you can edit the color, thickness and other parameters.
How to use the strategy
Let’s consider use of this strategy “Three touch” for binary options. In our example, we use it to examine the trend continuation. Look at the EUR/USD real time chart with timeframe 15 minute.
So, as we can see on the chart, the resistance line drawn above the descending highs. Points are marked with numbers 1, 2 and 3. And at the moment of third contact, we expect a rebound from the level and the continuation of the trend. So, at the contact moment or an unsuccessful attempt to break through our level (after the close of the candle) we purchase PUT option with the expiration time of 3 – 4 candles (45-60 minutes).
On the chart above, the line is drawn below the local minimums. Touches are marked with numbers 1, 2 and 3. And at the moment of contact, or an unsuccessful attempt to break through our level (after the close of the candle) we buy a CALL option with the expiry time of 3 – 4 candles (15-20 minutes).
Look at the example with EUR/USD chart and 15-minutes timeframe. Similarly with the first example we should purchase a PUT option here.
Look at the example with USDCAD chart and 15-minutes timeframe. This example (and the next one) shows us the pattern for CALL option.
On the all examples you see that after third touch we have very good signal for PUT or CALL option purchase.
Practice building and finding the figure “Three touches” You can easily find them as it happen quite often. Besides, it is interesting and profitable!
And of course, we are proposing you to test this strategy on the demo account at first. For example you can try demo account from IQ option:Open IQ option demo account