The Pinocchio Strategy is another common and popular strategy for trading Binary Options. A candle bar that has a very small body and a very long wick is known as a Pinocchio bar, or a Pin bar. Just as Pinocchio lied to us as his nose got longer, the candle bar lies to us as the wick gets longer.
A long wick means that the asset price is going in one direction and increases the likelihood that it will go in the other direction very soon. The market is lying to us so we trade against it. When the wick is down we place a CALL and when it is up we place a PUT.