Every so often, right when you get to your computer, you might actually see a quality trade setting up. This occurred for me during a simple glance at a GBP/JPY chart when I wasn’t even planning on trading at that particular time. I usually don’t trade nights (relative to Eastern Standard Time) because I’m familiar with how European mornings behave and usually trade some type of European currency that might move a bit more in the European hours as opposed to the Asian session.
In this case, price was moving up to the resistance 2 level of 174.880 on the 9:55PM (EST) candle and was showing signs of resistance there. Naturally, in a bit of a slower portion of the day this might be expected. With lower volatility in the market, pivot points tend to be respected a bit more.
Price rose above resistance 2 on the 9:55 candle before settling back down, suggesting that the little surge of buying here likely wasn’t strong enough to break this particular pivot point. A bearish candle ensued at the turn of the hour, closing around a pip under resistance 2. All things considered, this is a worthy indication that resistance 2 is likely to hold upon a subsequent re-touch and a put option would be a quality set-up. Nonetheless, you don’t always get the re-touch, and that’s okay. If trades set up the way you want them to, you take them; if not, they I’d never advise forcing things. To me, getting the entry at resistance 2 – of above if it ventured a bit over the line – is extremely important. In short-term binary trades, the winning margin is often determined by a matter of a fraction of a pip. Consequently, if your trade idea is well-considered yet your entry is poor, you can often end up with a losing trade despite essentially guessing correctly. And occasionally, you will lose trades solely for the fact that your fill was poor (i.e., the broker gets you into the trade at a price different from the one you wanted and often against your initial trade idea), but that’s largely something you can’t avoid unfortunately.
Upon the subsequent re-touch of 174.880 on the 10:05 candle, I got into a put option and the market receded back down from resistance 2 quite well following entry. This went in my favor the entire time and produced a winning trade.
But again, always make sure you’re smart with your trades by always sticking to a price that you want to get in at and not pulling the trigger early in fear of missing it. When trades are determined by these very small pip amounts, having lax standards when it comes to entries and getting into trades can make a drastic difference in your win percentage. Even assuming your general strategy/system is strong enough to consistently produce winning trades.