Close Trade: 2009-02-13 14:31
Thank goodness it’s Friday! Since the EUR/CHF has not gone anywhere and the end of the trading week is near, I have decided to start my weekend early by closing my trade. There is a meeting of the G-20 this weekend, so it’s probably a good idea to take some risk off the table ahead of event risk.
Closed remaining position at market (1.4937)
1st Half: +150 pips
2nd Half: +163 pips
Total: +1.04% Gain
So, a nice little profit for the week. Have a great weekend everyone and stay tuned for new trade ideas after we wait and see what the G-20 is going to do about the global recession and credit crisis.
Trade Update: 2009-02-10 13:24
It looks like the markets didn’t take too favorably to the statement from US Treasury Secretary Geither on the financial recovery plan. There wasn’t enough details for traders and risk aversion took hold of riskier plays like carry trades. EUR/CHF fell on the news and hit my first profit target. Time for some adjustments.
Half position closed at 1.4950. Adjusting stop on remaining position to breakeven at 1.5100. Will continue to target 1.4800.
No confidence in the markets today and probably for a while in my opinion. I remain short bias on carry trades for the time being. Stay tuned!
Trade Idea: 2009-02-09 22:24
Good evening! Got a couple of bearish technical signals on the EUR/CHF, so I think it’s time to jump back in short. Check it out!
A simple technical trade setup to go with my bearish bias on the euro. I have the 4 hour chart up and we can see a doji candle just under a previous resistance area. Doji candles represent a period of indecision, where neither buyers nor sellers won out that particular candle. In an uptrend, especially near resistance areas, this may signal a reversal as buyers have run out of steam. Also, my stochastics are showing that the pair may be overbought in the short term.
So, I have a simple short trade with my entry at 1.5100, and for my stop I used the average daily range of 150 pips. My ultimate targets will be the previous swing lows around 1.48.
Short EUR/CHF at market (1.5100), stop at 1.5250, pt1 at 1.4950, pt2 at 1.4800
Remember to never to risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
My major concern with this trade is the reaction to the US government’s rescue plan details tomorrow. It could possibly bring back confidence and risk tolerance to carry trades, such as buying the Euro against the Swissy. If so, I think any kind of rally will be short lived and traders will return focus to the weakening economy in the Eurozone and as many feel that the ECB is behind the curve. I’m in that camp and I think we may see traders price in stability issues with the Eurozone as it tries to balance the weaker member state’s economies with the stronger ones.
Stay tuned for updates and adjustments!