Close Trade: 2008-03-13 08:43
Our short position reached our first profit target at 2.0500 this morning, where we closed out half of our trade. 2.05 was a strong support area as GBP/CHF immediately bounced off and rallied from that point.
It looks like this pair is still in ranging mode, so I will close my remaining position at market
(2.0600) and look to short again at the top of the range.
1st half: +200 pips
2nd half: +100 pips
Total: +.75% gain
Stay tuned for a new trade idea, possibly on the same pair. I will watch to see if 2.0600 holds as resistance or if the pair moves back to the top of the range. See ya then!
Trade Update: 2008-03-12 07:44
A quick update on our trade. Our short position was triggered yesterday as GBP/CHF rallied up to the top of the range around 2.0700. Global risk appetites grew yesterday after the news of several central banks plans to stall the credit freeze.
Since then, the pair has fallen back into the range and hopefully we will see it reach the bottom to hit our first profit target.
We will hold for now as I think yesterday’s rally was just another opportunity for traders to play the overall negative sentiment in global risk. Stay tuned and good luck!
Trade Idea: 2008-03-10 18:49
The Swiss Franc has been killing it against the majors on global risk aversion, and after a period of consolidation, that trend may resume. I’d like to play this momentum with GBP/CHF as the pair begins to trade below previous lows, but I want to wait for a better price at the top of the range.
On the chart, I have highlighted the consolidation area. The pair is currently trading below the previous low around 2.0450, but we may see range players jump in this area and push GBP/CHF back up to the top of the range. If that scenario plays out, I’d like to short from there to jump in the overall trend, with my stop around 2.09 and my max target at 2.00.
Short GBP/CHF at 2.0700, stop at 2.0900, pt1 at 2.0500, pt2 at 2.0000
We have a large stop of 200 pips, so I will reduce my position size to remain within my 1% account risk comfort level.
For those who like to reduce entry risk, scaling in between 2.04 and 2.07 would be an appropriate area to build a position.
Overall sentiment is to see more risk aversion which should benefit the Swiss Franc and look out for a few key economic events this week including UK Trade Balance and Housing data, as well as the interest statement from the Swiss National Bank.
Stay tuned for updates. Good luck!