Orders Cancelled: 2012-09-13 21:45
So much for trying to play the breakout!
As it turns out, our buddies over at the Swiss National Bank decided against raising the peg on EUR/CHF. Instead, the central bank decided to keep it at 1.2000, and reiterated previous statements that it would defend it with the "utmost determination" and purchase unlimited quantities of foreign currencies to make sure the franc doesn't appreciate too much.
Naturally, we didn't see the spike that I was hoping for, as the pair barely moved. Once the news came out that there was no readjustment of the peg, I decided to just peace out and cancel my orders. After all, my trade idea was invalidated!
For now, I'll probably be looking for opportunities to buy EUR/CHF once it starts approaching the 1.2000 level. Keep in mind that while it is defending the 1.2000 handle, the franc continues to make new highs versus the dollar. With the Fed announcing additional quantitative easing measures, USD/CHF even sank to new lows. I wouldn't be surprised if the SNB is merely keeping the 1.2200 peg as an option to weaken the franc sometime down the road!
Thanks for following me this week, fellas! See y'all on the other side of the weekend!
Trade Idea: 2012-09-13 02:05
Yeah, I know. No one really expects the Swiss National Bank to make any changes to its monetary policy. Economists say it'll probably keep rates unchanged. But then again, that's not what I'm counting on!
I'm hoping that the SNB will raise the floor on EUR/CHF and cause the pair to spike up. Word on the street is that it could re-peg EUR/CHF at 1.2200. These rumors are actually the main reason why the pair has been hanging around 1.2100 over the past few days, instead of just chilling above 1.2000 the way it has been doing for the better part of the past three months.
Here's how I plan to trade this event:
Buy EUR/CHF at 1.2120, stop loss at 1.2080, profit target at 1.2200.
You'll notice that I didn't enter at market. Why is that? Well, I don't want to risk losing big time in the event that the SNB decides to reaffirm its commitment to defend the floor at 1.2000. So what I did was I set orders to buy above the 1.2100 handle in case it does announce a new peg at 1.2200. If that happens, I'll find myself on the receiving end of a 2:1 winner!
As usual, I'm only putting 0.5% of my account on the line. After all, it is a high-risk event that could have EUR/CHF swingin' all over the place.
What do you guys think of my plan? How would you trade this event? Hit me up with some comments below!
Q2 2012 Trading Performance Review
Weekly Watch: September 10 to 14, 2012
Read about my trading framework
Follow me on MeetPips.com
Follow me on Twitter
Like my Facebook page
Join my circle on Google+
- Faith in the SNB: Buying EUR/CHF at Market - Trade Closed 22:26 10 September 2012
- Buying at Bottom of CAD/JPY Range - Orders Cancelled 22:01 19 November 2012
- Ready to Pounce on GBP/JPY Double Top - Trade Invalidated 03:47 25 October 2012
- Sneaky Trend Line Play on EUR/JPY - Orders Cancelled 02:20 08 November 2012
- Weekly Watch: March 25 to 29, 2013 02:20 25 March 2013