Binary Options Trading for July 10, 2013: 3/3 ITM

I took three trades for Wednesday’s trading, all on the EUR/USD, as per usual. However, I did take an hourly (60-minute) trade on, which was something I didn’t anticipate doing but decided on regardless. I’ll share that trade at the end of this article. But for now, I’ll go through the standard 15-minute expiry trades I took on

Wednesday had a lot of really nice, smooth price action. Support and resistance levels tended to hold pretty well and no sudden major price moves occurred. The unfortunate part is that I missed the European morning session and didn’t start trading until nearly 8AM EST. As I’ve pointed out in the screenshot below, there would have been a couple nice pivot trades at around 3:40 and 5:45, respectively. The second pivot trade would have been nearly an ideal set-up, as the trend was up, price rejected the pivot point (which was turning into new support after acting as resistance earlier) on the 5:40 candle and was coming down to touch it again

But luckily for me, I was able to get in another pivot trade on the 8:35 candlestick. About twenty minutes prior, price had bounced off the pivot (1.28105) but had hovered around that level instead of retracing back up. If this had retraced back up to, say, 1.2818 before coming back down, then it might be an indication that the asset doesn’t have enough buyers in play to sustain the uptrend. But I checked the volume of the EUR/USD that had been traded on each 5-minute bar during this time period on one of my MetaTrader charts, and it appeared that the pair wasn’t moving much simply because there was little liquidity in the market at the current time. When it hit the pivot point again at just after 8:35 I decided to take a call option, trusting the support level created by the pivot and previous price history from that morning, along with the prevailing uptrend. The trade won by four pips.

My second trade doesn’t seem quite so clear. I have a red line marking off a price level, but as you can see from the above screenshot, there’s no price action shown on the chart that’s relevant to the level. But the line I have marked off is a price level I used for one of Monday’s trades (two trading days prior to this one). Oftentimes, I’ll leave horizontal price levels on the chart just for the sake of seeing how price acts around them again. Usually I will only do this for levels that I’ve traded and/or levels that look really strong. If price shows no further sensitivity to them I’ll remove them. In general, I’m not a fan of keeping a lot of junk on my charts as I believe it just adds unnecessary clutter and can induce confusion. I prefer to just keep a clean price chart with only pivot points and long-term Fibonacci lines plotted as an aid to find support and resistance levels, which is fundamentally what I base my trading on.

But in this case, once price got up to this old level (1.28407), price bounced off of it on the 10:15 candle. So I decided to watch the price action on a 1-minute chart and price bounced off the level again at 10:19, but I still remained patient and didn’t immediately jump into the trade. Once it re-touched at 10:21, it became clear that price was actually holding along a line of resistance so I took a put option at just above 1.28407. By expiration I had a five-pip winner.

And as I mentioned at the beginning of this post, I took a trade later that evening at StockPair. I made a small deposit there recently, but this was my first ever trade with them. I don’t have any interest in trading their short-term binary options, as the payouts are pretty low (just a 71% return), but on the 60-minute expiries, I can get 80%.

Just before 9:30PM, I was looking at a 30-minute time compression when examining my charts for forex trading purposes, and saw that the EUR/USD was hovering just below my 38.2% Fibonacci retracement level at 1.30727. Just in the afternoon alone on Wednesday, price had risen 365 pips, which is an enormous price move that is rarely seen, especially during New York afternoon/evening hours. Price had gone up from around that 1.28407 level up to 1.32056 before retraceing back down to the 38.2% Fib that’s relevant toward the price move from 1.20411-1.37104.

With the big recent uptrend and the fact that we were at a major price level (38.2% Fib), I decided to take a call option for an hourly expiry. I ended up taking the trade at 1.30701, 2-3 pips underneath the Fibonacci level. StockPair’s binaries work a little bit differently in that if you take an 60-minute expiry, it doesn’t expire at the top of the hour (e.g., 11:00, 12:00, etc.). It actually expires 60 minutes from when you actually get into the trade. Since I ended up taking this trade at 9:41PM, the trade expired at 10:41PM. By expiry, I had a 20-pip winner.

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