It was wild ride for currencies today, including AUD/CHF. I made a move to lock in profits after the ECB reaction & was taken out on the big reversal.
Original Trade Idea: Nibbling on AUD/CHF
After the ECB made their highly anticipated rate cut announcement, the Swiss Franc sold off across the board and broad risk sentiment went into bull mode. I decided and announced on my Twitter page that I moved my stop to .8340 to lock in profits in case this move would be faded. That was the case as the reaction to the ECB event was not only faded, but completely reversed and taking me out of my AUD/CHF long at .8340.
Total: +40 pips/ +0.125% gain
As I was trailing my stop, I considered the other option of taking the trade off completely as .8400 was being tested, but this was a big time event and I thought the probability of a momentum move was pretty good. Of course, there was no momentum, which goes to show the incredible choppiness of today’s market and how tough it is to find a trend. I think this solidifies a paradigm shift for me in that I really need to forget about trying to catch big trends for a while and focus on taking profit on decent intra-week moves.
I still like AUD/CHF for a long position, but I’ll take the weekend to re-assess after getting the U.S. NFP data (check out our Forex Trading Guide here) and market reaction. That’s it for the week for me and it’s time to catch some NBA Finals action. Thanks for checking out my blog and have a great weekend!
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