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Trading a Wick Candle with Resistance

You can stare at charts all day long and try to find the best trade possible only to watch it fail when you actually pull the trigger. Making solid educated guesses is critical when trading the binary options market. If you force trades, whether it’s on 60 second trades, 15 minute trades, or anything after that you will most likely suffer significant losses.

Today’s trade was based completely on resistance we had witnessed from earlier in the day. Price had held in three different spots before we entered our put option on the euro USD. The put option was traded near the top of the wick of a candle that occurred 30 min. prior to entry. The price had moved up along the wick and that’s where we pulled the trigger with 10 min. to go in the expiration.

Right out of the gate, the price moved against us about five pips. Usually when you see a trade move that much against you you tend to get worried. In this case, we knew we had a solid 10 minutes to go before the expiration time. Are charting analysis allowed us to think that it would be okay for the price to move in the opposite direction early on. Price tends to test new areas before pulling back. This trade followed these particular rules.

The price eventually moved back in the money showing us several pips of green throughout the rest the trade, but it did come down to the final minute for the trade to complete as a winner. This led us to believe that the trade area we were looking at was definitely an area of heavy resistance. We did not need anything else besides these resistance areas to take our trade. We do like to use pivot points, support and resistance lines for our entries, but sometimes you can create your own lines on the chart. This is very simple to do after you spend some time looking at the charts throughout the day.

During the video we noticed another trade develop on the EURUSD. The price had moved up to the pivot line and had we taken a put option by the time the price would’ve expired it would have been in our direction by three pips. This secondary trade could have been slated as the number one trade of the day instead of the trade we took 15 min. before. In this case we decided to jump on the initial trade first before the pivot point trade actually setup. Notice how in the image the price moved up through the pivot and created a nice solid wick on that same candle and never looked back within this timeframe. It just turns out that the price on the next candle after the price had closed, moved through the pivot line again. This price was showing signs of resistance and could’ve been used as another put option to the South side if you were willing to take on more risk in your trading.

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Comments

  1. hey Rich
    i am looking for a wick indicator, do you know where i could get it by any chance?
    thanks

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