USD/CHF Trading on Stock Pair: 3/3 ITM

I went back to some USD/CHF trading today that I’ve been doing quite a bit of over the past six weeks or so. However, my usual broker (Trade Rush) seemed to be having some server issues because I simply couldn’t get their website to load. So I decided to stick with the USD/CHF, but head over to Stock Pair, which is another broker I recommend. I haven’t traded with them much, but about a month ago I made a small deposit and made a trade that won, and got the withdrawal back in three days.

On Stock Pair, their binaries work a bit differently than other brokers. A 15-minute expiry is different in that it literally means the trade closes fifteen minutes from your entry, instead of a time like 9:15, 9:30, 9:45, and so forth. For instance, if you put in a fifteen-minute trade at 6:12:47, your expiry would be be at 6:27:47. Also, the lower expiry times receive lower payout percentages. Consequently, you will obtain pretty mediocre payouts if just doing the five-minute expiries (71% for EUR/USD). However, if you go up to the higher expiries, you can get in the upper 70’s, or even 80’s if you go to the hourly or higher expiries.

The five-minute chart is my base time compression that I look at for short-term binaries, so I definitely don’t want to choose an expiry that is way too far out. For instance, it’s pretty hard to predict what the market is going to be doing a day from now just by looking at a five-minute charting compression. If you’re looking to make predictions about market direction in a day, you’re probably best looking at at least a 30-minute chart. The basic point is that for binaries, you should always choose a charting timeframe that is relatively close to the expiry time for your trade. About a 3:1 ratio between expiry time and charting timeframe is about ideal for me. So for example, 15-minute expiries are pretty well suited to making decisions from the five-minute chart.

But due to Stock Pair’s increasing payout as expiration times increase, I chose the 30-minute expiry instead of the 15-minute. I think a 30-minute expiry can be reasonable to trade from a five-minute chart if it’s a major price level. Some trades are better suited to shorter expiries if you’re expecting only a short-term bounce (e.g., trades against the trend, in particular), but I was going to have to find solid set-ups today to be confident of a certain market direction thirty minutes in advance.

I started my trading today at around 6AM EST – a little later than usual but this just happened to be more amenable to today’s schedule. After looking at the early-morning market, I saw that the USD was making slight gains against the CHF, but had mostly been hanging around the daily pivot (0.91875) for the past three hours. I was considering a put option at the pivot level if one was able to set up there to my liking (i.e., bounce off followed by a re-touch), but on its first touch it blew right through and continued higher.

At this point, I really didn’t have any general idea of where potential set-ups could occur. This happens on occasion if no levels look good enough to trade. The pivot level seemed out of play at this point due to the breach below just before 6AM. I did have a decent resistance level at around 0.91955, but I wasn’t too positive about it. It wasn’t a very strong level of resistance and it would be hard to invest thirty minutes of confidence in the level holding.

However, a trade did set up pretty much by itself shortly after at the 0.9200 whole number. Whole numbers on the USD/CHF have never seemed particularly strong to me, but they can still act as support or resistance by themselves. But regardless of what you’re trading, never base your trade on the whole number alone. However, this put option set-up certainly had the price action working in its favor on the 0.9200 whole number with the double wicks. Wicks, of course, are something I rely on heavily to determine how likely a support or resistance level is hold. The combination of the double wick and the whole number led me to believe that this level would likely hold as resistance. Therefore, I took a put option at the touch of 0.9200 on the 6:45 candlestick. This trade spent about the first ten minutes or so out of the money, before going back below for a three-pip winner.

Price retraced down and bounced off the daily pivot point after that trade. Basically, a channel was forming between the pivot (0.91875) and the resistance level associated with the current day’s high (0.92018). A bit of resistance was encountered around 0.91968, but I decided to ignore it due to the fact that it wasn’t very robust and the daily high and pivot level were shaping up as better options to trade.

The daily pivot level was encountered once again just past 9AM EST. At this point, I was looking at a one-minute chart to get a closer view of the price action. When the market touched the daily pivot on the 9:16 candle, it bounced off and rejected the level. When it re-touched on the 9:17 candle, I decided to get in the trade. Normally I don’t deviate too much from the five-minute chart, and of course in this case, I’m taking 30-minute trades instead of ten- or fifteen-minuters. But I had a few things going in my favor:

1)    there was previous support seen there just before 8AM;

2)    it was the daily pivot level, an important intraday price level in and of itself;

3)    the trend was still slightly up for the day; and

4)    the 0.9187 price level in general is a current major line of support in the USD/CHF market as can be observed on the daily chart

This trade only won by less than three pips, but it went in my favor the entire time and was up by about sixteen pips at one point.

 

What turned out to be my final trade of the day came back up at the 0.92018 resistance level that challenged the daily high. Price rejected the level on the 9:30 candle as the U.S. markets opened and closed back around the 0.9200 whole number. Once it re-touched 0.92018 on the 9:35 candle I entered a put option. This trade went in favor right away and was up fifteen pips in its first fifteen minutes, even hitting the pivot point again in the process. (I wasn’t interest in another call option at the pivot due to the strong downward momentum.) In the last ten minutes of the trade, it actually came back up less than a pip from my entry point, but it eventually fell off again and I ended up with my best winner of the day of around ten pips.

I hope everyone’s trading is going well if you’re currently active in the markets. Please let me know if I can be of any further assistance to your trading needs.