Trade Update: 2013-5-28 23:02 pm EST
Not all things end happily ever after. What started out as a great trade took a turn for the worst when price action reversed on me. While my first and second positions won, the third position lost. This resulted in a small hit to my account. Here’s a summary of my positions as well as their corresponding gain and/or loss:
Bought at .9600 and closed at .9675: +75 pips
Bought at .9665 and closed at .9675: +10 pips
Bought at .9759 and closed at .9673: -86 pips (larger position size)
Total Gain / Loss: -0.77%
While I’m glad I was able to reduce my initial risk to only 0.77%, it’s still a bummer that the trade lost, especially since the trade was up initially.
Trade Update: 2013-5-23 0:40 am EST
On the hourly timeframe, we can clearly see that USD/CHF is just trending higher. I don’t see any reason why I should go against the trend, so I’m gonna take this opportunity to add to my positions.
Using the Fibonacci retracement tool, I noticed that the 50% Fib level coincides nicely with the pair’s previous high. We could see price test the area for support and if that happens, I will enter another long position.
Because the pair keeps on bouncing off support around the 100 SMA, I have decided to place all my stops just slightly below it, at .9675. This allows me to limit my risk. If the pair suddenly trades lower, my two positions (at .9600 and .9665) will close in the green and I will only incur a small loss on my third position.
Trade Update: 2013-5-21 1:20 am EST
It has been a wild ride, but my buy limit orders have finally been triggered! Yay!
My first entry, as I’ve mentioned, was at the 38.2% Fib level (.9665) while my second entry was at the 61.8% level (.9600). Price has gone my way since then, but USD/CHF has found significant resistance at the former swing high.
Upon seeing this, I’ve decided to limit my risk. I moved my stop for both positions to .9600. That way, I only stand to lose on my first position while making my second one risk-free.
I’m not sure whether price will continue going my way but the 100 SMA seems to be holding, which is definitely a good sign! I’ll be sure to keep tabs on my trade.
Trade Idea: 2013-5-16 4:15 am EST
Finally, a pullback! After days of waiting, USD/CHF has finally retraced enough for me to buy. As you can see, price has stalled and is experiencing support around the 38.2% Fibonacci retracement level. Since the Stochastic already shows that conditions are oversold, I’ve decided to jump in long at market.
Catching bottoms is hard, and I know that, so my plan right now is to scale in. I’m going to buy again at the 61.8% Fibonacci level as it nicely lines up with the 100 SMA and a broken resistance level.
I’ve placed my stop at .9500, below the most recent swing low. I’m ultimately aiming for new highs so I thought a trailing stop is more appropriate.
Why am I so keen on buying the dollar? It’s primarily because of its fundamental landscape. As I have mentioned in my Pre-Week Analysis, the Fed is already thinking of withdrawing some of its stimulus measures while other central banks have added or are looking into easing monetary policy even further.
Data from the U.S. have also been coming in better than expected one after another, making the case for tightening even stronger for the Fed.
To recap, this is my game plan:
Buy at market (.9665) and at .9610. 150-pip trailing stop. PT: .9950. As usual, I will risk only 1% of my account. Risk disclosure.