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.

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

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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

Trading the USD/CHF on July 18, 2020: 2/3 ITM

I started watching the USD/CHF at around 2:30AM EST. As part of my pre-trading routine, I single out price levels that I think could represent suitable trading areas. The most conspicuous was the resistance 1 level (green line) at 0.94501. In terms of a market level for potential call options, I had 0.94366 marked off due to the resistance that had been displayed there earlier in the morning. There was also the 50% Fibonacci retracement up at 0.94624 (relevant to the price move 0.91748-0.97500), but that could only come into play if and when resistance 1 would be broken. The uptrend was also strongly to the northside over the past few hours. However, pivot points tend to be very strong intra-day support and resistance levels, so I usually place less priority on trend when considering trade set-ups at pivots for that reason.

Unsurprisingly, based on the strength of the uptrend, price did hit the resistance 1 level on the 2:35 candle before bouncing off. I would have taken a trade at the level if it had re-touched on the following candle. The market also briefly went down to the other level I had marked off for call option set-ups (0.94366) just before 3AM. Of course, I did not take a trade here either, as I prefer taking re-touches of the level as a price action signal that the level is robust and worthy of taking a trade.

On the 3:10 candle, the market finally moved back up to resistance 1 and wicked back down. When it re-touched 0.94501 on the 3:15 candle I entered a put option. However, I probably would not have taken this trade if price had not retraced back down to the 0.94366 support level after the initial bounce off of resistance 1. If the market had only retraced back down to 0.94440 or so, like it had before the spike down to 0.94366, this would typically be an indication that there is very little selling going on in the market. Combined with the fact that the trend was clearly up, a break of 0.94501 could be in store. But given that price retraced a solid fifteen pips or so back into where the USD/CHF had been trading earlier that morning, I felt that the willingness to sell was still strong enough to enter a put option. I was able to take this trade for a six-pip winner.

After the move down from resistance 1, I began to think that a channel formation could be likely with another potential bounce back down at 0.94366. After the initial touch-and-rejection at 0.94366 just before 4:00, I took a call option on the touch of the level on the 4:05 candle. But the support did not hold and this trade went against me almost immediately after getting in. It lost by about twelve pips.

Right after that trade’s expiry, price formed support at around the 0.94244 level. This was convenient for me, as I really had no price levels considered for call or put options at that point. But it was nice to have some support form right away. I continued to watch the market for about a half-hour after the initial indication of price support, as I didn’t have any true idea whether this was a random breather before continuing to head down or a legitimate area of support where we might see a reversal. If the price action showed evidence of the latter, it would be a good place for a call option. I decided to take a call option on the touch of 0.94244 on the 4:55 candlestick. At first this went a bit against me, but it eventually wicked back up above the level and finished as a three-pip winner.

I did not take a call option on the revisit back down to 0.94244 at around 5:30AM. Price had been hanging around that level for over an hour and had consolidated into a fairly tight range. When ever the market tightens itself into a thin trading channel, I basically always wait for the market to break in either direction before looking for further trade set-ups. It’s just too risky to be taking trades in tight ranging conditions, even around what have been strong support and resistance levels. It simply eliminates a lot of your edge if the trade doesn’t have a lot of breathing room before it may quickly encounter support and resistance in the intended trading direction (e.g., a potential level of resistance five pips above where you took a call option).

A trade nearly set up back up at the 0.94366 level (where I had lost the call option trade earlier) at just past 6AM, but it never quite did. I continued to watch the USD/CHF until about 7:30AM, but I did not find anything worth trading, so I simply did not trade. It’s easier said than done, but never trade out of boredom, as only bad things can happen to both your account and confidence regarding your trading abilities going forward. Always treat your trading just as you would hypothetically treat running a business. Many businesses are “boring” in their day-to-day operations yet consistently make money. Trading unsystematically, indiscriminately, emotionally, etc. will always result in disaster much in the same way as it would hold true for any business.

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