Binary Options Trading: September 11-13, 2013
As I mentioned in a previous article, Im keeping my binary trading limited to one trade per day at most, since Im following a more time-restricted schedule at the moment. I did trade from Wednesday-Friday of last week, but in over twelve hours of screen time I only found two trades worth taking, and they werent even set-ups that I was particularly fond of (perhaps only 60%-65% chance of working out). For whatever reason, the USD/CHF market hasnt been particularly eventful over the past few days despite the fact that were a couple weeks past Labor Day and should see more trading volume entering the market as summer vacations come to a halt.
September 11
On Wednesday, I had two main price levels to work with, the resistance 1 (green) line at 0.93694 and the pivot level (purple line) at 0.93424. Both came into play, but neither set up a trade based on my personal strategy. which is fundamentally based around price action at pre-determined support and resistance levels. Just before 2AM EST price came up to touch resistance 1 but it closed above the level instead of rejecting it. It did retreat back down on the 2:00 candle, but according to how I trade binaries, this represents a set-up not taken.
For the two hours following, the USD/CHF assumed a morning downtrend by breaking to the downside of the congestion area that formed earlier just shy of the resistance 1 level. Once this downtrend began to form, it became likely that the pivot level would be targeted unless some unexpected degree of congestion occurred.
A bit of support did form along the 0.93547 level, but I did not take a trade there, although I did contemplate doing so. Ultimately, I felt that the downtrend would be the most likely way for the market to break on a test down to the pivot. This especially seemed likely with the false break on the 3:15 candle, which is a common price action signal that a market may be likely to break in that direction in the future (despite the price level holding).
Ultimately price did break to the down-side and I was hoping to get into a trade at the pivot level should one set up there. I also had the extra benefit of price support seen at the pivot level six hours prior. However, price immediately went through the pivot level once it reached that point. Since nothing set up, I decided to quit for the day and be content with a 0/0 day.
September 12
Thursday seemed to be yet another challenge to finding good set-ups. Wednesday had a larger than average trading range in terms of pip value, so naturally Thursdays pivot points were spread out more. Also no Fibonacci levels that I have drawn in on the monthly and weekly charts were in play. There was the 0.9300 whole number, but whole numbers tend to not see much sensitivity on the USD/CHF pair. So I had to go solely by the price action alone to find trades worth taking.
Luckily I did find a trade relatively early, just after 2:30AM EST. It wasnt one of my favorite set-ups by any means, and probably had only a 60%-ish chance of winning, but taking trades with those odds will be profitable over the long-run with an asset that pays out 85%.
I took a call option at the 0.92974 level. Minor support had formed there on the 0:45 (12:45AM) candle, and was subsequently rejected again on the 2:10 candle. In addition to a slight uptrend, I decided to take the trade on the touch of the level on the 2:35 candle, and wound up with nearly a three-pip winner by expiration.
September 13
My first trade consideration on Friday was a potential put option at the resistance 1 level of 0.93557. But like on Wednesday, I had no such luck with getting trades to set up on pivot points, as the USD/CHF immediately closed above resistance 1 on its first touch.
Overall, Fridays trading seemed almost identical to Wednesdays. A downtrend ensued, and while I had no real idea of where this pair could possibly bottom out, it did encounter a congestion period around the 0.93217 price level. Similar to my thinking in Wednesdays trading, I did not take a call option trade within the congestion area due to the morning downtrend that currently ongoing.
The pair finally reached a bottom around the 0.93070 price level. I began targeting possible put option set-ups back up at 0.93217 (old support turning into new resistance). However, just before I was on the verge of quitting for the day (I set my limit at 6AM EST), I was able to find a pretty good put option set-up due to some localized resistance that had formed at the 0.93163 level. After four consecutive candles that had rejected the 0.93163 level, in addition to the prevailing downtrend that was in place, I got into a put option on the touch of 0.93163 on the 5:25 candle for a 5:45 expiry. This trade won by two pips.