Contents:The most professional traders in the world tends to use only candlestick patterns in naked charts to spot unimpeachable trading opportunities. That’s the reason why The Canadian Evening – one of the simplest and most effective Price Action trading strategies - was invented.
What is the Canadian Evening Strategy?
The name Canadian Evening itself hints that this system is designed only for the cross-CAD currency pairs. It is a type of break-out trading strategy developed to seek entry points with only two horizontal lines. Traders don’t need to combine this technique with any indicator, that’s why it is considered a quite easy-to-use system.
How to use Canada Evening Strategy
To use this system, first, we must change into H1 chart and draw a rectangle which consists of the price action from 17:00 - 2:00 counted on Ottawa (Canada) time (UTC-5) on every trading day using horizontal lines. The top of the rectangle is the highest high while the bottom is the lowest low of the mentioned period.
Next, we will observe the market performance to seek for trading signals.
Call signals : When prices turn above the upper boundary and then retreat to test again the resistance-just-turned-support level, we will enter the market with a call signal. Note that we have to wait for the testing candle to close before opening any position. More than 4 candles closing after the breakout is considered an invalid signal.
A trade signal is a trigger for the action, either to buy or sell a security or other asset, generated by analysis.
Put signals : When prices break below the lower boundary and then rally to retest the support-just-turned-resistance level, a put signal is confirmed. Same as above for the entering rules.
We must also note that the distance between the level of the broken horizontal line and the close price of the breakout candle should not be more than 15 pips. Besides, if there are more than five candles closed, the binary options signal should also be neglected.
If you like this strategy, you might also be interested in this Double Up Trading Strategy
Pros and Cons of using Canadian Evening Strategy
First of all, this system is quite simply graphed making it very easy-to-use, especially for beginners. Secondly, the fact that it’s technically separate from other automatically-drawn indicators helps us avoid being messed up by the disturbing signals.
However, to stick to this strategy, we need extreme patience and strict discipline, plus prior knowledge of technical analysis.
Generally, the Canadian Evening is a strategy that mainly bases on market sentiment and helps traders follow the wind. But like any other trading strategy, this technique doesn’t guarantee 100% profitable signals. We must be patient enough to wait for the most reliable binary options signals to enter the market. Besides, risk controlling and psychological managing methods must also be drastically applied to avoid being emotional when using this strategy to trade.