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Binary Options and Gaps

Trading in any market after a gap in price can be quite difficult. When looking for a trade in the binary options market patience is key. In the trade we saw today with a 80 PIP Down gap at the opening of yesterday’s market, we knew we had to be observant of of the market conditions. The price of the euro dollar dramatically increased almost back to the gap price. A lot of people consider big gaps in one direction or another the trend for the day. However, a lot of times price tends to come back up or down depending on which way to fill the space that was completely missed.

In this case, we saw the price drop and shoot back up over the 61.8 Fibonacci number. The price hit support level II which in this case turned into a resistance point based on pivots. As the price came up to this level we took our put option to the South side. We saw a little bit of pain but it worked in our favor about four pips. The price point of the trade was definitely in our favor, but had potential to not work as well. Once prices stabilize you need to start looking for new trades to take on your 15 minute binary options.

Soon after this trade was taken the price stabilized around this resistance area. It had a tendency to move back down like last night but was determined to try new highs. With it failing again and again makes me think the trade will start to push down. As binary option traders we are looking at the price at this moment and we are looking at the trade that might develop in our favor. We don’t take trades for long-term period of time, so this allows you to find good entry points for call and put options.

The interesting thing about today’s market is that the pound dollar gapped down as well, but did fill it real quick. Now the price has exceeded the opening price and has moved up past resistance one area. The pound dollar definitely has strength on the day and there were several areas to enter call and put options. Even when you’re trading days done it’s always good to go over the charts and see if there’s setups that could have been taken based on your trading model. This is something to consider in the future for all trading instruments.

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