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My trade closed yesterday as EUR/CHF rallied back up to my entry price at 1.5450.

1st Half: +200 pips
2nd Half: +00 pips
Total: +0.50% gain

Looks like we saw “sell the rumor, buy the news” price action yesterday as risk tolerance grew and markets rallied after yesterday’s US employment data. Probably traders taking profit into the weekend. The insanely weak US jobs data reinforces how bad things are in the economy…and it’s not over yet!

For next week, I am going to look for another selling opportunity in this rally, so stay tuned and have a great weekend!

Trade Update: 2008-12-04 17:05

Hello! Just wanted to post a quick update as it looks like my trade is back on track today after we saw a surprising 75 basis point cut from the ECB today. I’m still gonna hold on to my short position as I think we will continue to see risk aversion through the end of the week, especially if we continue to see weak employment data out of the US.

So, I’m still up about 170 pips on the remaining position at the moment, and depending on data and price action tomorrow, I may close out my trade before the end of the week. Stay tuned!

Trade Update: 2008-12-01 16:05

Greetings! Looks like risk aversion is back after a positive week for EUR/CHF. Half of my position was closed as EUR/CHF hit the first profit target at 1.5250, and it’s time to do a few adjustments.

Half position closed at 1.5250 to lock in profits. Adjusting stop on remaining position to breakeven at 1.5450 to create a risk-free trade. Will trail stop on remaining position by 200 pips and continue to target 1.50 and beyond.

So, it looks like the rally was another opportunity for risk bears to jump back in at good prices. Not sure how far it will go lower, but it doesn’t look like the global recession will turn anytime soon. So I’ll just ride it for now and see where it takes me. Stay tuned!

Trade Idea: 2008-11-28 08:58

crosseyed chart

Got a “Turkey Day” special trade idea, one that wets the palettes of my longer-term trading friends. EUR/CHF has seen a fantastic run higher after hitting lows around 1.43, but has the rally run out of steam, and is the pair ready to reverse lower? Technicals may say so…let’s take a look!

It’s the same ol’ setup, but on a different time frame as I have the daily charts pulled up on EUR/CHF. The pair has retraced up to the 50% – 61% Fibonacci retracement area, which may be a possible resistance area. Couple that signal with stochastics, and it looks like there may be a potential reversal on our hands in the longer-term timeframe.

Fundamentally, there is still a recession hitting Eurozone that will have to be tackled, and with inflation concerns far off the minds of the ECB, we may see further rate cuts for the Eurozone and possible declines in the Euro.

Recession concerns may be elevated as we head into the holiday season if we see weak retail sales through the next few months. Jobs and GDP will be closely watched as well. I’m still bearish on risk and the Euro for now.

So, I am actually going to scale into my short position between the 50% and 61% Fibonacci area, but for simplicity for this blog, here’s what I am going to do:

Short EUR/CHF at market (1.5450), stop at 1.5650, pt1 at 1.5250, pt2 at 1.5000

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

Again, after the first profit target is hit, I will trail my stop from there by 200 pips and continue to target 1.5000 and beyond. Stay tuned and have a great weekend!

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