Trade Closed: 2013-11-29 1:40 ET
With the weekend coming up quickly, and .9050 being a tough level to crack all week, I’ve decided to close up shop to avoid weekend risk.
Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.
It was a pretty quiet week for USD/CHF relative to the big moves we’re seeing in other currencies like the British Pound and Aussie Dollar, and that .9050 was being stubborn all week. It refused to break after two tests, and it looks like it’ll hold once again on its third test. I’m sure it will eventually break if the trend holds on, but with the weekend coming up, I decided to avoid weekend risk by closing out manually at .9055.
Total: +45 pips/ +0.23% gain
I’ll re-look at this pair once again on Monday, but it’s not my favorite one to play at the moment with big moves happening in other currencies; traders gotta go to where to volatility is, right?
So, that’s it for me this week and its nice to close out with a small win. Thanks for checking out my blog and have a great weekend!
Trade Idea: 2013-11-26 3:20 ET
Good morning! I’m going with a technical short on USD/CHF as it’s making a clean downtrend all month. Time to sell around .9100?
Since it doesn’t look like we’ll get a Taper from the Fed anytime soon (or at least in 2013) we may see the Greenback tick a bit lower in the short-term. From the price action highlighted in the chart above, traders have been playing it that way all month and I don’t see anything in the calendar to change that this week with a pretty light week forex calendar of events in front of us. Also, risk sentiment has been biased towards the upside as of late, pushing traders away from the safe haven that is the Greenback.
I look to short here at the major psychological level with a pretty wide stop. My initial target is the major, major psychological level of .9000, at which point I’ll adjust my stop to breakeven, and then go for the October lows. Here’s what I’m doing:
Short half position USD/CHF at .9100, stop at .9200, profit target at .8900.
I’m only risking 0.50% of my account on this one, and with this trade structure, I have a potential reward-to-risk ratio of 2:1. If I’m in the trade and it does hit .9000, I’ll trail my stop to breakeven and reassess from there.