Range Play on USDCHF – Trade Closed

Trade Closed: 2010-08-19 2:26

PoD Chart

After barely reaching my first profit target, USDCHF moved south and headed straight for my breakeven stop at 1.0390. Boo! The pair dipped just enough to trigger my stop before heading back up the charts.

Now it’s hanging just below 1.0450, which means my trade would still be profitable if my adjusted stop was just a few pips lower! But even though I didn’t reach my ultimate target, I’m glad that I’m walking away from this trade with something in my pockets. This makes it official, my dry spell is finally broken! Yey! Now to catch up on Glee episodes…

Total P/L:

First profit target hit at 1.0450: +60 pips
Second position stopped out at breakeven: +0 pips
Total: 0.33% Gain

Trade Update: 2010-08-18 2:30

PoD Chart

It was a slow climb, but my USDCHF eventually hit my first profit target. Aha, my losing streak has finally ended! Things are looking up!

I don’t want to let this trade to turn into a loss, so I’m moving my stop on the rest of my position to my entry point at 1.0390. I’m going to let my profits run and continue aiming for 1.0600. Let’s see how price action for the rest of the week turns out!

Trade Idea: 2010-08-17 00:31

PoD Chart

On the fundamental side of things, I’m buying the dollar for the same reason everyone else is buying – risk aversion. While the Swiss franc is also part of the safe haven category, I believe that the dollar will come out on top.

The economic calendar presents very little to worry about. While there are a couple of high-impact reports that could cause volatility like the housing and building starts, industrial production report and weekly unemployment claims, none of them really have the potential to cause the pair to breakout. Unless some unexpected news comes out, this trade is pretty safe with a good risk-to-reward ratio!

As far as technicals is concerned, we can see that USDCHF has been range-bound for a while. Right now seems like a good time to enter since it’s near the bottom, and stochastics is signaling overselling, too. And take a look at those candlesticks! I mean, c’mon, you can’t ignore the long sexy lower wicks! Go, dollar, go!

I’m hoping the pair will rise high enough to hit the 1.0600 handle, but I’m willing to lock in some profits at 1.0450.

I set my stop a 90 pips away, well below the range‘s support. I’m keeping this one pretty tight because if USDCHF breaks downwards, it would already invalidate my trade idea. I don’t wanna wait until I lose more before I abandon ship!

Long USDCHF at market (1.3990), pt1 at 1.0450, pt2 at 1.0600, sl at 1.0300. As always, I will risk only 1% of my total account balance.

That’s my trade idea for today. I know I have set my profit targets already, but I’ll be sure to make modifications on my trade in case we see a shift in risk sentiment. I don’t want to get blown out by risk appetite again! Stay tuned, folks!