Technical Setup for a Day Play on USD/CHF – Trade Closed

Trade Closed: 2012-06-19 03:30 ET

Good morning forex friends! USD/CHF moved higher as expect, but I was a bit off on my entry as it didn’t find resistance until the next Fib higher. Luckily, the area did hold as resistance, and with no potential catalysts coming up, I decided to close out and look for a new opportunity.

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

PCDPOD20120618.review.png

On the chart above, we can see USD/CHF did find resistance at previous levels of interest, but it wasn’t until it hit the top of the resistance range (also the 61% Fibonacci level) before it reversed. Now, it looks like there’s a lot of potential downside to go, but given that I’d probably have to hold into the FOMC decision tomorrow to see it, I think it would be prudent to cut it now and move onto different opportunity I see forming on another pair. Holding on into that event is pretty much pure gambling, so I closed manually at .9524.

Total: +11 pips/ +0.06%

Overall, I liked cutting it quickly because it looks like the markets aren’t ready to turn back in to “risk-on” mode; it was a pretty weak reaction to this weekend’s “positive” Greek vote outcome. The risk bears may still be in control, which should be positive for the Greenback in the short term.

For now, I’m watching another trade setup forming on USD/JPY, so be sure to follow me on Twitter and Facebook for new ideas and updates.

Thanks for checking out my blog…good luck and good trading!

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Trade Idea: 2012-06-18 08:06 ET

Good morning forex friends! For today, I’m going with a technical, day trade setup on USD/CHF to play the short-term down trend. Will the major psychological area around .9500 hold and reverse the market?

PCDPOD20120618.png

My trade for today is technical play on USD/CHF as it looks like the potential ruckus of this past weekend’s Greek election was overblown. There wasn’t much movement during this morning’s Asia and morning European sessions, and we even saw a little bit of risk-off action to boot. And given we have the FOMC meeting on Wednesday, I think we’ll have limited participation in the markets and price action responding mostly to technicals, which is why I’m going with a technical day trade.

On the 15 minute chart above, we can see USD/CHF has been trending lower since last week, and because of the “Greekend” event, now testing the areas of previous minor resistance. Now, stochastics is indicating the market is short-term overbought, but I think I’ll wait until it hits that 50% Fibonacci level (and Friday’s high) before jump in short with a small position. Here’s what I am going to do:

Short quarter position USD/CHF at 0.9535, stop at .9580, profit target at .9460

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Risk Disclosure.

Actually, since this is a day trade, I’m only risking 0.25% of my account on this trade and this trade structure gives me a potential return-on-risk of about 1.66:1. Of course, I’ll be sure to keep a close eye on the markets and events with our trusty forex calendar. Of course, I’ll probably close out my trade ahead of the FOMC meeting this Wednesday if I keep it on that long. If I do adjust, be sure to follow me on Twitter and Facebook to stay tuned. Thanks for checking out my blog…good luck and good trading!

  • nacho

    great setup! price action hoovers around 9460 now, so you would have got your expected TP! I entered yesterday around 9550 but unfortunately  moved SL to BE this morning and got stopped out just before the big drop ;(

  • Samyboy

    Thanks for the post, got in at 0.9530 and closed this morning at 0.9519 for +11pips too. Looking forward to more trades with you! 

  • Ichwan

    thanks , it make get profit 60 pips on usd / chf. Make your best analysis again. thanks so much .

     

  • Trading Advisory Company

    Wow!! i am very impressed with your lovely post.. i am so glad to left comment on this..this has been a so interesting read, would love to read more here….

  • pipcrawler

    Thanks for the comment guys.  Looks like I should’ve held on longer doh!