Downtrend Play on USD/CHF – Closed

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.

USD/CHF 1 hour forex chart review

USD/CHF 1 hour forex chart review

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?

USD/CHF 1 hour forex chart

USD/CHF 1 hour forex chart

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.

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t follow what I do. Risk Disclosure.

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.

Of course, anything can happen in the forex markets, so if the story changes I’ll be sure to reassess and adjust quickly if necessary. Stay tuned by following me on Twitter and Facebook!

  • maxpesh

    October 24th was the lowest recent at .8923. You must know something that I don’t ?

    • Kootz

      0.88892 @ 16:00 24-10-2013, by my MT4 (H1 chart).

      • maxpesh

        Sorry Kootz, must’ve read it wrong only looked at the Yahoo finance chart and I am brand new to all of this, but enjoying the learning 🙂

  • Kootz

    Hi there. Firstly, let me start this with the caveat that I’m a brand new trader.

    I’ve also been short on USD/CHF recently, but currently looking for a reversal at around 0.90650 for a channel on the D1 charts:
    D1 graph with both channels

    Is it not well defined enough compared to the H1 down trend?

    I think if I see a reversal for the D1 channel I’ll be going long with 0.92600 as a target. If it breaks through this channel, I’ll be in with you on a short trade looking for a target of 0.89800 from the lows at the beginning of Oct.

    Thanks in advance.

    • Pipcrawler

      Thanks for sharing your analysis Kootz. It looks like USD/CHF is currently hanging around you reversal watch area. I’m watching it pretty closely too for an adjustment. Good luck!

  • maxpesh

    I have to say that according to Hector’s rules this would be a no trade. Just saying ?

    • Pipcrawler

      Hey maxpesh, who is Hector and what are his rules?