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Weak Euro Leads to a Solid Binary Trade

Recently announced about an hour prior to this trade the euro interest rates were cut causing the price to tumble significantly to the south side. We witnessed significant moves and waited for a solid retracement to consider entering our own put option. An hour after the move down we witnessed a price start to move up about 30 pips. We then saw some minor consolidation before the price dropped a bit more, but never far enough where the price got out of reach. We then saw the price push up through that most recent retracement high. This is where we entered our put option trade on the EURUSD.

The price we got in allowed us a little bit of wiggle room on our entry and by the end of the trade we were in 11 pips of favor. We only saw minor pain against us throughout the trade. The price had several wicks in the past given us a nice resistance for entry 3 minutes after a small consolidation area. The price dropped significantly, giving us a solid trade for our trade of the day.

It’s better to stay with the trend but try not to call bottoms or tops. In this case we saw a nice retracement up for an area to push back down. Sometimes people think the price is just too weak that makes them take put options at Low’s. We find it best for the price to move up back into itself before taking a put option. There’ll be plenty of times to take call options on this EURUSD today but you just want to be careful not to take them too early. You want the price to work in your favor and allow it some room so you don’t get into early.

The image below shows the weakness today on a 5 minute chart and you can see how the price tried to move up a couple of times along the way. The wicks on the 5 minute chart show you good areas of future support levels to take potential call setups. There are also Wick levels on the tops which show you good areas to take put options.

5 Minute EURUSD Chart

In either case these are areas where you should look for trades when the price is way out of the pivot levels. In this case, we are over hundred pips down from support level three. When you’re this far away from those lines finding price action to trade needs significant research. Don’t force trades at these levels either as it will come back to haunt you when you’ve picked the wrong side.

Check out our call option trade from the other day. Also, be sure to check out our latest OptionFair review.
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