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.

And so far, I’ve been very happy with using traderush.com as my new broker. I received my first withdrawal in five business days.