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Finding Good Setups Can Be Tough

This week we’ve been talking about trading in tough markets and how sometimes it’s best just to stay away. Today was another trade that had price action around it, but not enough to feel really confident with the trade. I was watching price action since about 8:30 this morning and nothing was really setting up on the EURUSD at 24option.com. Our charts were showing some areas of support and resistance, but nothing stood out where I felt comfortable risking money in the market. This is something that happens quite often as a trader no matter what instrument you are trading. You could be trading stocks and watch the markets just be flat and try to risk your money. In binary options you need price movement to make a winning trade. Obviously you can win with less than a pip move, but you want to feel confident enough for the price is going to move at least a little bit.

Today’s trade was based not on a support area, but an area where price had been through earlier in the morning. We noticed how price was bouncing back up towards support level two and then consolidated. We then were seeking to go with the trend by taking a put option and within the first few minutes we had a good-looking trade. Soon after, price then moved against us several pips given us quite a scare. All of the sudden price then dropped off five candlesticks in a row giving us 2/10 of a pip winner. Although we will take the trade because it was a winner it’s not something I will seek in the future. Price has since fallen off little bit more towards the past support area near the lows of the day. It’s questionable whether the price will move back to pivot or extend through support level three.

In the image below you can see how price action had been moving down over the past 24 hours. This is a 5 minute chart of the EURUSD. Price was forming new lows consistently before making a big move to the North side. It then reversed just above support level one breaking the lows of the day at support level two. This type of price action can have you twiddling your thumbs wondering what is going on. It was moving down pretty good and then all of a sudden you break the most recent lows and highs. Wild price action to say the least.
Downward Price Action
You start to think price will move back towards the pivot, but before you know it, price is falling off like a rock creating even newer lows. Once I saw this I decided it was best to stick with put options and not force any call options, unless price hit support level three. Currently support level three is at or near a whole number of 1.3000 which will make it very hard to get through. Should price get down there by two o’clock in the afternoon I may take a call option at this level. It will all depend on how price is acting going in that direction.

We will continue our trades all night week of course, but if you still haven’t seen the chart set up page and video please make sure you check that out to get the latest downloads for free. This information will allow you to see exactly what I see on my charts and make it much easier to watch the videos. If you have any questions or comments please leave them below and make sure you check out the YouTube channel as well.
Risk Disclaimer

Comments

  1. Hi Rich
    Just to let you know the chart set up worked a treat on my Meta 4, good stuff, I have been setting my pivot, resit and support lines manually up until now using a standard automated pivot calculation tool, so this will save me a huge amount of time.
    Have been putting in to action your advice/strategy and psychology now for a few weeks and it really has put me straight, I am pleased to say it is the first time I have felt confident and in profit since starting binary trading a few months and a few £££,s ago. It really is about reading all the signs and using all the tools at your disposal to make this binary option trading successful.
    Thanks
    Steve

    • Steve,

      I’m glad I’m able to you help you become a more focused trader. Be sure to stay in front of everything and only trade the best setups. It’s best to trade on a minimal basis. Keep me posted on your progress.

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