5th July 2012 – Binary Play on Gold

Hello Traders, I’ve had a very busy few weeks and thought Id update you on a few of the trades I’ve had play out in that time.  The first one is Gold.

 

Since the large Bearish Outside Bar in mid february price had gently meandered down towards the 1500 – 1600 dollar range. In mid May it bounced off the weekly 89 SMA and produced a Bullish Pin Bar Reversal followed by another pin bar the following week (see Upwards pointing arrow).  This was enough to convince me that despite a move down price was still in an overall long term uptrend and may find support in the 1550 – 1600 region.  I bought a No Touch Barrier for $1517 with a 5.5 week window. I got a good price with an 68% profit potential and basically just let the trade run out.

 

A few weeks later I was checking up on the position and watched as how the 89 SMA was providing some solid support.  Price wasnt bouncing higher with any gusto (despite the shocking market news coming out) but it wasnt ready to break lower either. I felt that it was likely to continue into a range for the summer months so added a bracket position that price would not breakout of the range between $1517 – $1676 dollars before COB on Thursday 5th July.  Why that date?  Nothing more scientific than it being a time zone which provided me with a good reward potential and would close the day before an NFP announcement.

So I now had two positions running on Gold and pretty much left them to do that…just run down.  From the daily chart below you can see there were some good swings….but all well within the range that I had set.

So my positions were just left to do their thing (I’m much more relaxed about Binary Positions than my direct positions in the market) and were not interfered with.

The first position hits its timeout on COB 3rd July.  It had run for 36 days and 8 hours without touching the 1517 price level and generated a 68% profit return.

The 2nd position closed 2 days later on  the 5th July. It had run for 17 days and 10 hours without price touching either $1517 or $1676 and generated a 89% profit return.

These were quite simple trades using basic Technical Analysis and then left to their own devices.  One of the things I like about Binarys for longer term plays is that your risk is known beforehand and short of a Black Swan event (which always happen more often than we think…but thankfully not these last few weeks) the position can be just left to run out.

I’ll update you on a few more of these trades over the next few days. Until then trade well!

Paul

 

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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

View all posts by FXTraderPaul

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