Friday’s trading was my best of the week. Many individuals don’t trade on Fridays, so the volatility is a little lighter, but I’ve never had issues finding good set-ups on that day of the week. Some traders simply want to work only four days a week, while others outright advise against trading on Fridays. Obviously, I’m in neither camp. I like trading and really couldn’t envision doing anything else for a living at this point so I’m always eager to trade the markets as much as time permits. Skipping Fridays, in particular, would just represent missed opportunities.
When I first started trading after 2AM (EST), I had two levels that I had considered for areas to trade. First was the resistance level formed at 1.30724 for put options (see top red line in the final image of this post) and the resistance 1 level at 1.30617. Price did come down to resistance 1 on the 2:25 candle, but rarely do I take trades on only the touch of a level. With regard to binary options trading, where win percentage is the primary determinant of how profitable you will be (unlike many other forms of trading) I wait for price action to confirm that my level is still valid. This serves to help increase the probability of my trades working out. Since price did not reject resistance 1 and closed through the level, I did not take the call option and hence saved myself an unnecessary losing trade. Price strongly fell through 1.30617 for a solid 20-pip drop just before 3AM.
When the market retraced back up, it formed a resistance level at 1.30507 – roughly at the half whole number of 1.30500. I don’t normally pay attention to half whole numbers, as the market will not always show sensitivity to them. But if you do notice that a support or resistance level has formed on a half whole number, it adds a slightly higher degree of validity to the level, as it holds a very minor amount of psychological significance.
Price did reach back up to 1.30507 at 4AM after about an hour-long period of consolidation. The market rejected the level on that candle and re-touched on the 4:05 candle where I took a put option. I also definitely had the general direction of the trend for the morning working in my favor. It closed out as a two-pip winner.
The market eventually broke back above 1.30507 a half-hour later, and rejected a re-test of the level on the 4:35 candle. Therefore, I took a call option on the subsequent touch of 1.30507 on the 4:40 candle, expecting that price might get back up to the green resistance 1 line at 1.30617. This trade did not work out, as I lost by one pip.
After the expiry of that trade, the market continued to consolidate around the half whole number area. However, the breach of 1.30507 invalidated the level as a place for me to trade going forward unless new price data formed another support or resistance area there.
When price final broke out of the consolidation pattern with the green 5:50 candle, I once again began considering resistance 1 (1.30617) as a potential area for put options. However, the market broke above the level on the 6:15 candle and I never did take a put option trade. Nevertheless, on the next candle, price rejected resistance 1 and being that the market was now officially in a bit of an uptrend, I began targeting 1.30617 as a potential level for a call option instead.
When price touched resistance 1 again on the 6:25 candle, I took a call option for a 6:45 expiry. I had the chance to do just a very short, three-minute trade at this level, but I feel most comfortable doing binary trades 5-20 minutes long on a five-minute chart. I also had the trend going in my favor on this particular trade, so I figured that I should let the trade have some more time to develop. With the breach of resistance 1 earlier, I figured this was a clue that the market was likely to continue above that resistance level in the market. Fortunately, choosing the 6:45 expiry over the 6:30 expiry was the better decision, as I would have lost the 6:30 trade, but won the 6:45 trade by about three pips.
My final trade of the day came back up at the 1.30724 resistance level (top red line) that had formed all the way back at 2AM. Price came up, touched, and strongly rejected the level on the 7:10 candle.It re-touched on the 7:15 candle, where I took my put option right at 1.30724. This was my weakest set-up of the day, as I was technically going against the prevailing uptrend that had characterized the past hour-and-a-half of trading. On the candle before expiration I was down by over six pips on what turned out to be a false break before going back in my favor. After the drama had settled, I had a winner by one-tenth of a pip. I was very happy to walk away at this point and went into the weekend with a solid week, with 6/9 trades ITM.
And, of course, definitely please let me know if you guys ever have any questions about anything.