Pick of the Day: USD/CHF – Trade Closed

Trade Closed: 2007-12-28 13:54

It looks like we ended the month on a positive note as the Greenback continued to sell off, pushing USD/CHF to our second profit target and close out our trade.

1st Half: +120 pips
2nd Half: +235 pips
Total: +355 pips/ +1.96%

I hope everyone did well on this trade and have a happy new year!

Trade Adjustment: 2007-12-27 12:21

USD/CHF has reached our first profit target at 1.1395. We have closed half of our position to lock in some profits and adjusted our stop to break even to create a risk free trade.

If USD/CHF continues to fall further, we will lock in profits by moving our stop on the remaining position along the way. Stay tuned for more updates and a possible position close before the end of the new year. Good luck!

Trade Update: 2007-12-26 21:41

It has been a nice an quiet holiday season for our latest trade as USD/CHF has kept in its range between 1.15 and 1.16 in the last couple of weeks or so. The pair is currently trading back down near our entry point after coming within a few pips of stopping out to below 1.15 briefly.

We will continue to hold onto this trade through the end of the year, market willing, as commodities rise and the effects of the subprime fallout weighs on the Greenback once again. We are also seeing a return to carry trades as we wind down 2007, so we do have to be cautious as markets are uncertain going into the new year.

No new trade idea tonight and probably for the rest of the week as trading volume will continue to be light going into 2008. Anything can happen of course, so we will always be ready. Stay tuned my friends for updates!

Trade Idea: 2007-12-18 20:14

PoD Chart

Today, we are taking a look at a longer term play on USD/CHF as the pair looks ready to return to the downtrend.

On the daily chart, we can see the pair returning to a downward trendline. Using the Fibonacci tool, we can also see a 61.8% retracement – another resistance area. And finally, stochastics are showing the pair is short term overbought.

So, we will short the pair at market and target the Fibonacci levels on the chart.

Short USD/CHF at market (1.1515), stop at 1.1605, pt1 at 1.1395, pt2 at 1.1280

Remember to never risk more than 1% of your account on any single trade.

Good luck and good trading!

  • pipbull

    There’s also hidden bearish divergence!! Good set-up pipcrawler

  • pipbull

    There’s also hidden bearish divergence!! Good set-up pipcrawler

  • hypnos63

    hi its hypnos63 new member you can see my posts on newbie island.
    i like your analysis and am following it. i’m waiting now.
    1. you use US EST time right?
    2. can you make your charts a little bigger or more magnified as i had trouble reading some parts of it.
    3. since you used a daily chart for your analysis, that means we must wait a day for the =ve or +ve result right?

    thanks please reply to hypnos63@yahoo.com

  • hypnos63

    hi, also how do you setup two profit takes on meta trader? mine only allows one. or do you mean place another order after the first profit take?

    thanks hypnos63@yahoo.com

  • Pipcrawler

    Thanks Pipbull!

  • Pipcrawler

    Hey hypnos63…Yes, this is a longer term play. Trading will be thin for the next couple of weeks because of the holidays, so i think it may take a while for this trade to play out. We use EST. I do usually make the charts larger, but I wanted to get the whole trend on this one. I don’t use metatrader, but there are many talented traders in our forums who do who would be better suited to help you out. I would ask there, but with what I do for the “Pick” is set up multiple limit orders with the same stops and different profit targets. Hope this helps!

  • JeffDow

    Any explanation for the strong uptrend today? I haven’t been able to find any comments on it.

  • 4xpipcounter

    A big delcine will happen for the swissy, but the top of the daily kumo should be hit first at 1.1669.

  • JeffDow

    But that is above our stop?

  • JeffDow

    Anyone explain the spike in USD/CHF. What market occurence contributes to this?

  • JeffDow

    So I just shorted a position you’re telling me is going up a total of 154 pips from my entry point….blowing out a stop?

  • Pipcrawler

    Trading volume is thin this week, so we may see spikes than normal as there are not enough buyers and sellers to keep as liquid a market as we are used to seeing. We’re still open on the trade. If we get stopped out on this trade I may look to short again around 1.17… hopefully we won’t get stopped out though…

  • hypnos63

    hi its hypnos63 new member you can see my posts on newbie island.
    i like your analysis and am following it. i’m waiting now.
    1. you use US EST time right?
    2. can you make your charts a little bigger or more magnified as i had trouble reading some parts of it.
    3. since you used a daily chart for your analysis, that means we must wait a day for the =ve or +ve result right?

    thanks please reply to hypnos63@yahoo.com

  • hypnos63

    hi, also how do you setup two profit takes on meta trader? mine only allows one. or do you mean place another order after the first profit take?

    thanks hypnos63@yahoo.com

  • Pipcrawler

    Thanks Pipbull!

  • Pipcrawler

    Hey hypnos63…Yes, this is a longer term play. Trading will be thin for the next couple of weeks because of the holidays, so i think it may take a while for this trade to play out. We use EST. I do usually make the charts larger, but I wanted to get the whole trend on this one. I don’t use metatrader, but there are many talented traders in our forums who do who would be better suited to help you out. I would ask there, but with what I do for the “Pick” is set up multiple limit orders with the same stops and different profit targets. Hope this helps!

  • JeffDow

    Thanks Pipcrawler. I’ll just up my margin….and leave my stop where it is. BTW……what is a “daily Kumo”.

  • JeffDow

    Any explanation for the strong uptrend today? I haven’t been able to find any comments on it.

  • 4xpipcounter

    A big delcine will happen for the swissy, but the top of the daily kumo should be hit first at 1.1669.

  • JeffDow

    But that is above our stop?

  • JeffDow

    Anyone explain the spike in USD/CHF. What market occurence contributes to this?

  • JeffDow

    So I just shorted a position you’re telling me is going up a total of 154 pips from my entry point….blowing out a stop?

  • bartho

    TELL ME MORE DETAILS ON TIME FRAME I SHOULD USE IN ORDER TO FOLLOW YOU GUYZ UP I AM BEGINNER PLS I LIKE HOW U GUYZ ARE NARRATING SIGNALS PLZ GUYZ HELP ME OUT
    THANKS, MAIL ME @ BARTHYKE@YAHOO.COM

  • Pipcrawler

    Trading volume is thin this week, so we may see spikes than normal as there are not enough buyers and sellers to keep as liquid a market as we are used to seeing. We’re still open on the trade. If we get stopped out on this trade I may look to short again around 1.17… hopefully we won’t get stopped out though…

  • JeffDow

    Thanks Pipcrawler. I’ll just up my margin….and leave my stop where it is. BTW……what is a “daily Kumo”.

  • JeffDow

    Well…I googled “Daily Kumo” and found this long winded explanation:

    The Ichimoku chart consists of five lines and the calculation of these five lines involves only taking the midpoints of previous highs and lows, similar to the Moving Average studies. Even with its simplicity, the completed chart is able to present a clear perspective into the price action of the security at hand.
    The five lines are calculated as follows:

    1) Tenkan-Sen = Conversion Line = (Highest High + Lowest Low) / 2, for the past 9 periods

    2) Kijun-Sen = Base Line = (Highest High + Lowest Low) / 2, for the past 26 periods

    3) Chikou Span = Lagging Span = Today’s closing price plotted 26 periods behind

    4) Senkou Span A = Leading Span A = (Tenkan-Sen + Kijun-Sen) / 2, plotted 26 periods ahead

    5) Senkou Span B = Leading Span B = (Highest High + Lowest Low) / 2, for the past 52 periods, plotted 26 periods ahead

    Kumo = Cloud = area between Senkou Span A and B

  • bartho

    TELL ME MORE DETAILS ON TIME FRAME I SHOULD USE IN ORDER TO FOLLOW YOU GUYZ UP I AM BEGINNER PLS I LIKE HOW U GUYZ ARE NARRATING SIGNALS PLZ GUYZ HELP ME OUT
    THANKS, MAIL ME @ BARTHYKE@YAHOO.COM

  • JeffDow

    Well…I googled “Daily Kumo” and found this long winded explanation:

    The Ichimoku chart consists of five lines and the calculation of these five lines involves only taking the midpoints of previous highs and lows, similar to the Moving Average studies. Even with its simplicity, the completed chart is able to present a clear perspective into the price action of the security at hand.
    The five lines are calculated as follows:

    1) Tenkan-Sen = Conversion Line = (Highest High + Lowest Low) / 2, for the past 9 periods

    2) Kijun-Sen = Base Line = (Highest High + Lowest Low) / 2, for the past 26 periods

    3) Chikou Span = Lagging Span = Today’s closing price plotted 26 periods behind

    4) Senkou Span A = Leading Span A = (Tenkan-Sen + Kijun-Sen) / 2, plotted 26 periods ahead

    5) Senkou Span B = Leading Span B = (Highest High + Lowest Low) / 2, for the past 52 periods, plotted 26 periods ahead

    Kumo = Cloud = area between Senkou Span A and B

  • 4xpipcounter

    Jeff, maybe I was out of place for bringing it up in this forum, because the methodology that everyone trades by is different here. As a rule, and check any chart you’d like, when price enters the cloud (more properly called the kumo), it will at least hit the other end. As the pair continues to go sideways in a bearish cloud, the cloud will descend, which means either it breaks the cloud or it will descend earlier than my original post. Bottom line, until the objective has been hit, the pair is going nowhere. With the pair being so overbought, and the divergence pattern unfolding on the daily, it all adds up to an eventual sharp drop, if not a return to the DOWN.

  • 4xpipcounter

    Jeff, maybe I was out of place for bringing it up in this forum, because the methodology that everyone trades by is different here. As a rule, and check any chart you’d like, when price enters the cloud (more properly called the kumo), it will at least hit the other end. As the pair continues to go sideways in a bearish cloud, the cloud will descend, which means either it breaks the cloud or it will descend earlier than my original post. Bottom line, until the objective has been hit, the pair is going nowhere. With the pair being so overbought, and the divergence pattern unfolding on the daily, it all adds up to an eventual sharp drop, if not a return to the DOWN.

  • dbertw

    After seeing the prediction here and checking out the charts I have to say that for the bears in the group the best I can come up with for you is a reversal that doesn’t start until 119.00-(ish) and that’s using a weekly trendline and ‘cheating’ the angle slightly to lower it otherwise it sits near the 122 area…at least with the 119 area you have a 61.8 fib level to battle as well. With a bullish engulfing pattern pattern on the weekly candle as well as all of the fundamental aspects of the market coming to light I would tend to think that the next move is up for a little ways at least. Keep in mind that what played a significant role in driving the USD down so hard and fast was the housing/sub prime fiasco. If the ‘new deal’ helps to remedy part of that then you have two other factors that will boost the USD in coming weeks to months and that is: 1. the us job market is still in good shape and 2. the negative impact that the weak USD has had on other nations around the world. When I think of these fundamental issues as well as looking at the charts I gotta believe that this pair is headed up for the next little while…Just my thoughts though and I reserve the right to be COMPLETELY WRONG!! :)

  • dbertw

    After seeing the prediction here and checking out the charts I have to say that for the bears in the group the best I can come up with for you is a reversal that doesn’t start until 119.00-(ish) and that’s using a weekly trendline and ‘cheating’ the angle slightly to lower it otherwise it sits near the 122 area…at least with the 119 area you have a 61.8 fib level to battle as well. With a bullish engulfing pattern pattern on the weekly candle as well as all of the fundamental aspects of the market coming to light I would tend to think that the next move is up for a little ways at least. Keep in mind that what played a significant role in driving the USD down so hard and fast was the housing/sub prime fiasco. If the ‘new deal’ helps to remedy part of that then you have two other factors that will boost the USD in coming weeks to months and that is: 1. the us job market is still in good shape and 2. the negative impact that the weak USD has had on other nations around the world. When I think of these fundamental issues as well as looking at the charts I gotta believe that this pair is headed up for the next little while…Just my thoughts though and I reserve the right to be COMPLETELY WRONG!! :)

  • pipfiend

    Nice pick there pipcrawler

  • pipfiend

    Nice pick there pipcrawler

  • Pipcrawler

    Thanks!

  • Pipcrawler

    Thanks!

  • h9402486

    Great job.. hope to see another one soon. Thanks.

  • h9402486

    Great job.. hope to see another one soon. Thanks.

  • dbertw

    Excellent Call as I was incorrect in my assessment…

  • dbertw

    Excellent Call as I was incorrect in my assessment…

  • hypnos63

    HI GREAT TRADE! WHAT DOES 1.96% REFER TO THOUGH? (NEXT TO TOTAL 355 PIPS ABOVE)
    THANKS FOR ALL THE TIPS

  • Pipcrawler

    the “1.96%” is the total gained if you risked 1% of your account on the trade.

  • hypnos63

    HI GREAT TRADE! WHAT DOES 1.96% REFER TO THOUGH? (NEXT TO TOTAL 355 PIPS ABOVE)
    THANKS FOR ALL THE TIPS

  • Pipcrawler

    the “1.96%” is the total gained if you risked 1% of your account on the trade.