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Several Catalysts in this Trade

Over the past couple weeks we’ve noticed how price action has been fairly weak over the entire market. We’ve been waiting for some time to get a solid entry on the EURUSD and today it finally happened. We noticed how price had moved up since yesterday forming a stronger daily range then what we’ve been seeing. This led us to believe a pullback was a strong area to enter a call option. We saw how price was coming up to resistance three but not actually getting there. This made us more comfortable with a call option on a pullback to resistance the next resistance area which becomes new support.

Price moved through resistance and formed a small channel between 1.2880 and 1.2908. This particular channel was hanging around the whole number of 1.28. Whenever you have a channel form around a whole number you can use that as a new level of support now that the price has pushed through it. This channel also showed support several hours before we actually took this trade. Another notch that made this trade more powerful.

Price moved down to the bottom side of the channel at about 1.2892 and that’s where we took our call option. Within a couple of minutes Price had a nice jumper candle that extended through 1.280 reaching almost 10 pips in our favor. Price then consolidated and slowly started to drop, but never even came close our entry. This gave our trade a nice five pip winner.

The image below shows exactly how the formation of the channel was made. Price ping-ponged all the way through to our entry. While writing this post, price action continues in this same pattern. It has formed another top of the channel and another bottom of the channel. It will be interesting to see how this price continues going forward through the rest of the day. This will also mean this level of 1.28 should be considered for all future trades as well. Even if we get extended through resistance three or even back to resistance one price coming back to this area will need to be monitored carefully.

Price Channel Holding the Level

We talk about formulating a trading strategy that works for you. If you watch the binary markets and notice how price action continues to move this will make things a lot easier for you. Sometimes it takes a little bit of effort to formulate a plan, but it gives you a much better idea of how to trade in the binaries than just guessing. We take this pretty seriously and hope you do as well. Trading just on a whim in the binary markets will get you in big trouble. Please be careful and have some catalysts working for you when you take your next trade.

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