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Tricky Binary Trading

After several hours of boring price action the EURUSD decided to fall off a cliff. Actually it has fallen quite a bit this morning from the pivot level, all the way down past Support level three. Our purple line of 1.3000 is in play today and should be interesting to watch over the next few days.

We were watching a price action trade setup against the trend. Being such a weak market we needed to make a good decision and not force the trade. If price were to move to the the north side at this point, then we could consider put options all day which is with the trend. If you are jumping in on a trade against the strong trend it is definitely important to have something on your side besides just a line. Price is weak and could stay weak all day. Don’t get stuck.

We entered our trade as price was pushing through the purple line of 1.3000. We didn’t want to force our entry into a call option based on the weakness the Euro was facing. Although we did not have other catalysts helping us make our decision, we knew a call option would be our best bet at these lows. There weren’t many opportunities for put options based on the retracements of this significant move to the South side. After a green candle formed on the 1 minute chart we took the call option soon after. Price consolidated for about 2 minutes before moving up close to seven pips from our entry. The last minute of the trade showed the price action moving further to the south side barely giving us a winner of two pips. The next candle pushed even further below are entry and had this been a trade at 24option or another 15 minute broker it most likely would have been a loss.
The image below shows the price action coming off the pivot level all the way down passed support level three. You can see how the price extended through the purple line of 1.30. We love to trade extended moves, but today was just too significant of a move to the South side to take any call option after that. Another thing to consider was the range of the EURUSD. Yesterday’s price action was weak causing the support and resistance levels to be much narrower than the average. If there was an opportunity to take a put option on a retracement back into these levels that would’ve been the move of the day.
Weak Euro Moving South
Yesterday’s price action trading was one of those days where you could’ve walked away and been happy not to take a trade. I bring this up because it’s important not to force trades that are not there for the taking. Yes, although you only need to win by a tenth of a pip, price action will dictate what you should and should not do. It’s best not to trade when price is just stalled out and there aren’t signals giving you a proper entry. I bring this up because it’s important especially over the next couple of weeks price action where i could be fairly weak. Don’t be afraid to not trade. If you feel like you want to take the trade, and you don’t want to risk money, than you could trade this on a demo account. This may help you become a better trader knowing that you picked the right direction and your decision making will become stronger.

We will continue our trading tomorrow as well into the rest of the year. If you haven’t checked out the chart setup video please make sure you do that.
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