The past week showed a proof for how much simplicity works!
This time, i’ll start by showing some examples i mentioned on my previous analysis, for the ones that follow, it was suppose to be a successful trading week, let’s take a look on one of the nice breakouts we experienced – Gold
The purpose of this example is for you to embrace a binary option strategy that is super simple to learn and implement on your trading plan
So here is a screen shot from previous week
Gold Daily 01.08.2016
As you can see the trend borders are defined by two lines – resistance line and support line, now lets see what happened on Oct. 4th
There is a clear breakout from the support line, well this is the outcome, now lets see how you supposed to trade the Gold
Some currencies and commodities are too difficult to trade on short time frame such as 60 second, 5 minutes or even 15 minutes, one of them is the Gold which is very technical so it’s perfect for long term trading, for this breakout example i used 1 hour time frame:
Gold 1 hour time frame:
The support line is still there..now lets zoom-in until we see a chart we can clearly trade upon
Gold 1 hour zoom-in chart:
The red arrow is where a trade should have been fired, i used one touch binary option type and gain a successful trade, as i always mention, it’s better to have only few trades a week and to wait for the right setup then to try to trade each signal you feel that might be successful.
Personally, i very much like the one touch binary option type, click here if you want to learn more about it.
The GBPUSD provided a similar opportunity, same as Gold, the GBPUSD showed a breakout from a support line, this time the trigger was not given immediately, at first there was a false breakout after a while a true breakout candle appear and a trigger to a successful trade follow by that.
GBPUSD 1 hour breakout
I bring this example to point on the three main rules that define a true breakout:
- Most of the breakout candle is beyond the support/resistance line.
- A bearish candle for breaking out a support line, a bullish candle for breaking out resistance line.
- The end price is closing below the support line or above a resistance line.
So what’s the upcoming week holds for us, let’s continue with what we started with – Gold,
After a nice breakout, the next support line will test the Gold, if it continues with the decreasing trend we should wait, but if it will remain at these pricing level it might be a good chance to join the uptrend as shown in the daily chart
Looking at the EURUSD, it looks like it waits for some serious trigger in order to make a move, by its behavior the move should be super volatile and sharp, when we see a narrowing down of price range there is a big move that breaksout the boundaries, in this case the narrowing down takes too long, the breakout will be super volatile, in the meantime you can take advantage by trading boundary binary option type.
As a reminder and similar to EURUSD, there is a triangle patern on USDCHF, it worth to follow if any breakout occurs
Basically, the market waits for a serios trigger, until it happens, think how to take advantage from this market behavior.
In case you have also some success story or anything else you would like to share or ask pleasd leave me a message here.
Have a successful trading,