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Trading Binaries in Chop City

We’ve talked about choppy markets in the past and today was one of those days where it was best just to walk away from your computer. If you witnessed the price action on the currency markets you noticed how we stayed in a tight range which allowed for very few setups. When you get in these types of situations it’s best to start working on something else and trade.

However, since we take our trade of the day and we won’t force it we did notice a trade set up later in the morning. Although this was not an ideal setup it did have the flavor of a good put option at a whole number. We like to use whole numbers at resistance and support for our trading. Price had finally extended through the channel that was formed over the last six or seven hours. We then noticed the price coming up to the whole number and decided to take a put option.

Price extended by two pips over 1.28000 and has fallen ever since. This allowed us to take our put option with a little more confidence than if we had taken it 5 to 10 pips earlier. Price is currently falling back down to the lower side of the channel which is only 30 pips away. If you can believe it, the channel that was developed all day was roughly 30 pips wide. This makes for one of the tighter long term channels I’ve seen in a sideways moving market. It’s a market that shouldn’t be traded if you can help yourself.

Choppy markets will destroy your account by taking trades that you think will work, that go against you minutes later. Once you lose the first trade you have a tendency to take another inside the chop which puts yourself in a tough situation. The spiral continues until you realize that either your account has no more money or you’re so mad you may throw your computer out the window.

The image below shows a 15 min. chart that has the consolidation that has occurred since nonfarm payroll on Friday. Remember, when we have a nice solid trade in moving markets like Friday, price has a tendency to slow down the next day. In this case, Price was slowed down on Monday which allowed for really sour trading.
Choppy Market Conditions
If you happen to take a trade today hopefully you are using some other currency pairs or possibly a stock binary. Picking the right time to trade is critical. From looking at the overall markets it appears that nothing has really shown any signs of fluidity. This makes me think that tomorrow should be a much better day for trading binaries.

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