EURUSD Day Trades – March 12 - choose online binary options trading!

A trending morning for the EURUSD which provided a couple opportunities I liked. The first came in the London session prior the US open.

Usually I use a 1-minute chart, but a quick look at the 5-minute chart convinced me I should use it today, as the entry points were a bit cleaner. On the 1-minute chart the price was “riding” my envelope lines (envelopes introduced here), whereas the 5-minute bars were touching the lines and bouncing off. Since the entry prices will vary on the different time frames, I will always opt to trade the time frame that is “respecting” my indicator(s) to a higher degree.

The first trade occurred when the price reached my lower envelope during an uptrend. At this point all signs were “Go” for the long as we were making higher highs and higher lows. Used a 3.5 pip stop, and a Fibonacci Extension tool to provide some possible targets.

I originally planned on using the 100 level to take profit, but when the price failed to reach it on the first rally, and then pulled back, this created a triangle pattern and another opportunity to go long at my envelope (as well as the rising trendline).

1. EURUSD 5 Minute Chart

fig1

Since the price was still making higher lows, I moved up my stop from the first position to just below the second entry. When the price broke above the top of the triangle I edged my target up to the 138.2 level (check mark). The price did continue to run, but there was some whipsaw like action within the 5-minute bar I got out on, so given the price action prior (rather sedate) it was a good exit. The profit was about 7 times my original risk, and with two positions there’s no need to get greedy.

The next trade came on the pull back after the strong run up. The pullback was fairly strong so I waited for a price to pause before I entered at the lower envelope. By “pause” I mean I waited for bar that first touch the envelope to complete, and then let the next bar complete as well. Since the price was still at my envelope that was enough confirmation for me to go long, since the pause alleviated some of the potential that the price was going to blow right through me and keep dropping.

2. EURUSD 5 Minute Chart

fig2

3.5 pip stop again, which managed to hold through another small pullback. The price then popped higher, but was quickly met by selling, well below the former high. Based on the deep pullback and hesitation to move higher well below a former high, I opted to pull out of the trade. This resulted in a tiny profit on this trade.

Final Word

There is a fine line between being too aggressive and being too conservative. Your trading method should help you find that balance. Being patient enough to wait for good entries, take more profit when the market is offering it and being able to take a small profit or loss when there is evidence the tides are turning against you. As corny as it sounds, one of the best ways to maintain this balance is to analyze the market by talking out loud–stating your expectations, as well as voicing all other possibilities you see, and then deciding verbally how you will proceed with a trade, or why you have decided not take a trade. While in a trade, continue to talk, staying on top of changing market conditions so you can quickly adapt.