About Pick of the Day

Pick of the Day Author

At the end of each trading day, I will find what I believe is the best looking short term trade setup for the upcoming trading day. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. Trades will be posted by 1 am ET, Monday through Thursday evening.

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September 2007

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Pick of the Day: USD/CHF - Close Open Orders

Posted 20:40 25 September 2007 by Pipcrawler

Trade Closed: 2007-09-25 20:40

We will close all open trade orders as the pair continued south without a retracement.

Close all open orders. No trade.

Trade Idea: 2007-09-25 04:00

PoD Chart

Greetings! It looks like we may have a chance to jump into this Dollar downtrend at a better price with USD/CHF. The pair is currently in ranging mode, taking a breather after dropping lower on the Fed rate cuts, and I expect sentiment to remain short bias on the Greenback for quite sometime.

On the chart, we can see it was a pretty steep drop, and if the pair made its way back up to the 61% Fibonacci retracement level we have a strong probability of resistance and reversal. That level also marks a previous level of support-turned-resistance, after the pair broke lower last week.

So, we will short on retracement...Here we go:

Short USD/CHF at 1.1800, stop at 1.1850, pt1 at 1.1750, pt2 at 1.1700

Please remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Stay tuned for updates! Good luck and good trading!

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Comments (3)

This pair is currently fetching 1.1675 so my question is: would you also endorse going long right now anticipating that it will go to 1.8000 so that you can turn around and short it for the pick of the day? If it's going to fall when it hits 1.8000, why not make money on the way up before shorting it?
pigactor | Posted 09:29 25 September 2007
Here's my take on it: Doing as your suggest is not the best idea because trading is about limiting your risk; suppose the price never does rise to 1.1800 before it reverses downward. What happens then? PipCrawler won't have lost anything, because he never entered a trade at all, whereas you would be losing. There's nothing REALLY wrong with doing what you suggest; but it all depends on how much risk you're willing to swallow. Just don't let your desire for profit cloud the warning voices.
PipsiCola | Posted 10:57 25 September 2007
Thanks for your view PipsiCola... Let's remember that anything can happen in trading. What Pigactor suggests is possible as well as the scenario that PipsiCola suggests... Whatever price action the market presents, you should have a plan for entry, exits(profit target/stop loss), and risk management... To answer your question pigactor, no I would not go long based on my plan for this particular trade. But if you have a system that signals you to go long, then go for it...as long as you have a complete trading plan before you execute the trade...
Pipcrawler | Posted 12:32 25 September 2007

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