Forex price action has calmed down quite a bit since an action packed August. We’re now seeing ranges across the crosses, one of which is GBP/CHF and setting up for simple long trade.
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On the one hour chart above of GBP/CHF, we can see the pair has been ranging between the 1.49 – 1.51 area since the beginning of September. We just saw a retest and reversal of the top of the range last week, and possibly on its way back to the bottom of the range just above 1.49. I’m looking to go long on a retest of support for a simple technical range play, also I’m more in favor of the British pound (economy is recovering/potential rate hike) than the Swiss franc (weak data and negative interest rates) on a fundamental basis. My stop will be around half of the weekly ATR to give the trade room to breath, and my target is the top of the range for an acceptable potential R:R. Here’s what I’m doing:
Long half position GBP/CHF at 1.4925, max stop at 1.4775, profit target at 1.5100
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 about 1.16:1. 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!