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Trades Based on Consolidation

We’ve had some good trades over the past few days and this was another that played in our favor right from the beginning. As we hit resistance one about 40 minutes after our trade, we are still enjoying our entry point. This consolidation area after making highs of the day was a predictor for our call option at 24option.

Over the course of the night we saw price hang around the pivot point of 1.28339. Price eventually consolidated down to the trade of the day that occurred this week at 1.2813, before pushing back up once again. Price then peaked above the pivot level making some new highs, but forming some solid wicks. Price push down on a few quick candles just below a consolidation from four hours prior. Price formed 3 to 4 candles in a row staying in a tight range. We took our call option on the break of this range seing five pips in our favor and closing out for a 3 pip winner. Price continued to move up and is still making new highs since our entry around 30 pips or so. It’s now battling the Resistance one level, which we mentioned in the videos may be a good area for a put option.

The image below shows a green arrow at our entry. You can see how price climbed pretty significantly on that candle and the candle after. Price climbed through the pivot eventually and started to make new highs of the day later on. Anytime you can get in a good trade like this you should mark down the setup. We continue to look for trades of this caliber and have done so all week. We’ve been fortunate enough to find trades early in the morning and not have to worry about trading later. We hope this continues throughout the rest the week.
Working a Support Area

This Friday is the nonfarm payroll news event. Make sure you guys are aware of this at 8:30 Eastern standard Time. Price action can get a little shaky just before the news event comes out. We usually like to wait at least 30 minutes before entering our trade. Unless something obvious happens, we will not take a trade until we see things come back to normal. This will allow us to take the continuation or reversal move based on the price action we see on the chart itself. Last month we saw some significant moves on the nonfarm payroll day. Just because last month saw big moves doesn’t mean it’s going to happen again. Make sure you are aware of this and only take the best setups possible.

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