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Trading Call Options Near the Low

If you watched the EURUSD this morning, you witnessed several trade setups. As price was coming off the pivot level of 1.3091 we started to think call option. It wasn’t until around 9:30 where we entered our trade. Price formed a nice move past the support level two. Price also hung around the purple line of 1.3042. This line has been in play for several months now, and continues to be a catalyst for a lot of trades.

Our trade was designed around several wicks and consolidation that occurred during the 9:00 hour. We noticed price wasn’t making too many new lows, but wasn’t strong either. We took a call option thinking a bounce was about to occur. We’ve noticed over the past couple of days, how price was trying to make new lows only to bounce quickly after the new lows were created. These type of moves are almost consider like fake breakouts when breakouts are occurring. This is why we don’t trade breakouts as much as we used to. Too many people get stuck in these trades as price drops off a cliff, only to realize that their down within minutes of entering trade.

Price did rise in our favor by a couple of pips. We closed out with a one pip winner and on a day like this, we’ll take it. It almost appears that we might have found a bottom with our entry. Always interesting to get in the low of the day, but this is yet to be determined. Price action could fall off and make new lows towards support three or the purple line of 1.300. Wait and see scenario.

The image below shows several trades that occurred around our pivot level and support lines. It also includes the trade we took. Notice the three red arrows throughout the chart. The first one occurred in the middle of the night where price had moved up to the pivot level and completely retraced back down. You can see around 9:50 on the chart which formed a nice wick moving back up to the pivot level. Price created another wick falling off nearly 50 pips from that second pivot move. This is one of those trades where trading spot Forex made a decent amount of money. Price then formed a nice little consolidation area between support level one and support two. Price was trying to extend to new lows, but failed to do this several times. The third arrow pointing to the North Side was where we entered our trade. Although our price finished in the green the next candle went against our price by several pips forming another new low. However, after this five-minute wick price has since moved up nearly 20 pips and continues to rise.

A Few Trade Setups

A few trade setups this morning that played out nice.

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