Trading Pivot Points 23 ITM

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Trading Pivot Points: 2/3 ITM

Wednesday (June 26) was a bit of a strange trading day, as no pure support and resistance trades set up very well. I started watching the EUR/USD just after 4AM and it was tough to get a general feel for the market. There would be some choppiness and indecision in the market, only for a very brief big price move to occur, then barely any price movement, followed by weak trending movement, only for a another jumper candle to occur. It was definitely one of the toughest days I’ve ever had to figure out. It may or may not appear that way to you from the screenshots, but watching it live was very confusing.

Fortunately, my pivot point indicator gave some semblance of organization to a market otherwise lacking in much order. Even so, I felt that my three trades could have gone either way based on the price action that followed my entries. In fact, for the screenshots below, I actually used a purple line to denote the trade’s expiration; it can be difficult to discern whether the trade worked out or not just from judging where the arrows are located. Nevertheless, I felt confident in all three set-ups and a 2/3 ITM day is something I’ll take any day.

Price came down to my support 1 line (top yellow line – 1.30455) right around 5AM EST. Price broke below it on the next candle as a false break before closing back above support 1. This told me that price was showing some sensitivity to the level and that it could be offering a good call option set-up. Price had been in a slight downtrend for the past ninety minutes at that point, but the market was essentially horizontal for the morning. When it did touch 1.30455 on the 5:05 candle I took a call option. The false break did suggest that price might be likely to trend lower, but this was a very short trade – under ten minutes – so I only needed a short-term bounce to have a successful trade. The trade actually went against me the majority of the time, but the trade crept back above my level on the expiration candle to close out as a 1-2 pip winner.

Price hung around the support 1 line for another twelve minutes of so before trending further downward. At this point, I had support 1 pegged for potential put option set-ups, and support 2 (bottom yellow line – 1.30116) noted for potential call option set-ups. I also had a major whole number possibly in play at 1.3000. But if the market had a visit to 1.3000 in store it would likely take a breather at the support 2 level – possibly long enough to net a winning short-term binary trade – given that so many day-traders pay very close attention to daily pivots.

But the market never got down to support 2 in the period between 5AM-9AM despite coming close. Usually, I would have simply stopped trading for the day and been content with the , but I stayed intrigued by the the choppiness of the market and found a put option set-up at around 9AM back up at support 1.

Price had made a big move up to support 1 on the 8:30 candle. I did not trade this, as the price move was due to the U.S. GDP statistic being released. Since the figure did not match expectations, the Euro made gains against the USD. The market had gotten back up above support 1 but failed before retracing below. Price again tried to bust through 1.30455 on the 8:55 candle before failing again.

Taking the put option on the subsequent touch of support 1 on the 9:00 candle wasn’t a perfect set-up due to the false breaks, but I definitely had confidence in the trade working out. The retracement off the previous touch of support 1 at 8:30 had been strong by reaching back into an area where price had been trading at earlier in the day. The trade turned out to be about an eleven-pip winner.

My final trade of the day came on the 10:40 candle after price had touched and rejected 1.30116 (support 2) on the previous candle. I actually got into this trade with about 3-4 minutes before expiration (Trade Rush has a three-minute lock-out period instead of the more typical five minutes). Unfortunately, I never quite got the price bounce I wanted and lost the trade by a couple tenths of a pip. If that had been a trade on 24option, though, it would have lost by about ten pips.

Pivot Point-heavy Trading on Trade Rush

I went back to some USD/CHF trading on TradeRush this Tuesday (August 27, 2020), as that asset gives me the best payout I can find on standard high/low options. As the title to this article suggests, I relied heavily on pivot points in my trading today and several of these levels were visited on the USD/CHF. They really do act as strong guiding features in my trading by helping to determine where price might go and potentially reverse, or show some type of sensitivity at the very least.

My first trade came down at the 0.92132 support 1 level. This price acted as support just after 1AM EST and I expected that it would likely hold again if price action should support another bounce. On the re-touch on the 1:50 candlestick, price bounced off and formed a long doji candle, which is commonly indicative of market indecision and hence potential reversal. Therefore, I took a call option on the touch of 0.92132 on the 1:55 candle. Being this was TradeRush, I was using 15-minute options here, so this trade closed on the 2:10 candle (i.e., starts at 2:10, ends at 2:15), and wound up as a six-pip winner.

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The retracement from the bounce off support 1 went for about seven pips. That doesn’t seem like much, but in such a low-volatility time period, a seven-pip rebound was good enough to trade back into several recent areas of minor resistance.

As a result, given the retracement was sufficiently strong, I continued to keep support 1 as an area to consider call options going forward. Sure enough, on the 2:20 candle, price touched and rejected 0.92132 again and set up a call option on the touch of the level on the 2:25 candle. This trade went through a lot of drama and went both ways many times. It fell through right away, before wicking back up and closing at 0.92132. It fell hard again on the 2:30 candle, saw a strong bounce on the 2:35, before spending some time ITM on the closing candle before losing by about two pips.

For just over a half-hour period starting on the 3:45 candlestick, price experienced a large unexpected drop before reversing around 4AM EST and picking up forty pips in about twenty minutes. There wasn’t any news at this time outside of German IFO survey data at 4AM (economic sentiment index), but that’s a very minor event and not enough to effect the market in that way, and the move started before it regardless. I checked other pairs to see what currency seemed to be the one affected. The EUR/USD and EUR/JPY both dropped by about fifty pips. A very USD-heavy pair like the USD/CAD only rose about twelve pips. So clearly it was probably some European bank likely dumping Euros before European market hours and the effect of the transaction was being felt throughout the forex market given it’s all intertwined and correlated to varying extents. It’s rare that something like this happens, but fortunately I wasn’t in a binary trade at this time.

Once the market finally started leveling out, I began targeting put options at the daily pivot point of 0.92293 and call options back down at the 0.92132 support 1 level. A line of resistance did form around 0.92233 right around 4:30AM EST and it was tempting to take a put option there. But recognizing that the trend was up and had seen a lot of recent upward momentum, in addition to the fact that a test of the daily pivot seemed likely, I decided against a put option. It ultimately turned out to be a good decision.

The market came less than a pip shy of testing the daily pivot before coming back down to support 1 (0.92132). By the time price hit support 1, the market pattern seemed to suggest a breach of 0.92132. However, just by watching the chart it didn’t seem like the market had the energy to do much of anything. Once it did touch 0.92132 on the 6:10 candle, it bounced off the level by about four pips on the following candle before re-touching on the 6:20. Given I was only looking at about a five-minute trade at this point I decided to get in for a short bounce. So I took a call option at 0.92132 for the third time today and had a two-pip winner by expiration.

Price did open and close below support 1 on the 6:40 candle, and although I expected price to continue falling, it stayed surprisingly buoyant and spent the better part of the next two hours ranging back up between support 1 and the daily pivot. The USD/CHF did, however, end up below its support 3 line for the day after shedding over forty pips near the U.S. market open.

But overall, I was 2/3 ITM today and I can always be happy with a day like that. And, of course, no fancy strategy techniques were applied. This was one of those days where no real support or resistance cleanly set up just from the price action or price history alone. But I was able to use the pivot points to give me a better idea of where the market could go be going and what could happen when it gets there. For that reason, I’m a strong believer that pivot points are probably the most effective binary options indicator for short-term/intraday trading, at least for those who like to rely on support and resistance as the general basis of their trading.

ITM.Trading

About me Buy wholesale and sell premium. but also buy what is being bought and sell what is being sold!

If this holds its a long way down

Sellers have emerged around this resistance level. DYOR as always

I would expect some compression into this triple top if it does end up eventually breaking it. Before this compression it is premature for the bulls. 1) ADX over 40 can be used as an extreme reading if you don’t consider the market to be trending. 2) RSI reading went into extreme territory (80+) and is now dipping back under it 3) 200 SMA is flat which is typical.

1) The last two times the RSI has passed into overbought territory there has been a significant retrace 2) Hangmen candlesticks signify sellers stepping in / bulls losing control, and we have had 2 of them in the past 2 days 3) Dipped into structural resistance this morning and was sold off DYOR as always

After being pounded on poor earnings buyers have clearly found a reason to love the stock again! 1) Higher weekly high 2) Higher weekly low 2x 3) Bullish candle that is roughly 75% filled so therefore is strong 4) Bounce has occurred at a trendline level so I expect it will hold into the future 5) The 101.1 level was also the 0.618 fib from wick low to wick.

$RSG is showing all the signs of the beginning of a new multi week trend 1) Weekly break out of a consolidation level has held for 2 weeks, indicating that this is unlikely to be a false break 2) ADX has begun to rise very sharply. Some of the most powerful trends start at a base of the low teens then jump suddenly to the high teens in a matter of a couple of.

This may be worth watching if you are looking at a trend continuation / bullish entry into ZTS. Price is also a potential support trendline. DYOR as always

$AEE is displaying far too many things that are worthy of considering a short for 1.5-3 R:R trades; 1) 2 previous days have respected the High-Low 50% fib almost to the cent 2) RSI has been toying with the RSI overbought level several times and is dipping under it once again 3) Price is peeling away from the upper bollinger indicating change of momentum 4) MACD.

A bit of noise around the 15minute/50EMA but ultimately it has held and is a decent spot to enter long if you like $NVAX DYOR as always

Enter long if stop is triggered DYOR as always

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