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Trading at Significant Lows on the EURUSD

When seeking a solid binary trade it is best to always work with the trend. In this case, price was reaching new lows and it was to the point where taking put options was not as favorable as taking call options. Sometimes you have to change up the way you trade based on where the price is located. We notice how price dropped so much over the past year that once we hit these new lows it was time to take a call option.

The 5 minute chart showed a nice solid wick candle given us an area for support. Price moved against us about a PIP for only a short period of time. Price then moved up significantly to the North Side and gave us a nice solid winner of about five pips. You may ask yourself why would you trade against the trend? You need to consider the factors of taking trades with the trend at certain levels. If price had been moving up at the time a put option might’ve been a stronger move. In this case, the price is moving down and was so far deep the call option was the only method we were seeking. Either way it worked out really well.

The image below shows the price and how it moved up from the entry we took. You can see the wick that was formed and the consolidation that followed. Soon after our trade was finished you can see how the price went up even more. In fact, with in an hour of this trade the EURUSD had moved up nearly 90 pips. If you are trading spot FX trades or futures this would’ve been a significant move for you. These trades don’t happen that often, but when they do happen it can make your week or even your month.

New Lows are Bounced Hard

The important thing to remember here is, always trade based on what you see. Yes, the price could have kept going to the south side, but it was too difficult to get on the put option at new lows. This is where buyers come in and short traders have to cover their positions. The best part is being in cash when this happens and jumping on the train in the right direction.
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