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Mornin’! I saw an opportunity to buy the dollar when a bit of risk aversion in the forex markets took USD/CHF to a nice retracement level.

China once again caused ruckus in the markets after the PBoC actively weakened the yuan for an eight consecutive day. The aggressive move encouraged panic-selling in China’s equities markets, enough to trigger a forced suspension only 30 minutes after the opening bell. Yep, 30 minutes. A House of Cards episode would’ve been longer (but no less dramatic).

Traders flocked to low-yielding currencies like the yen and franc and pushed USD/CHF down just above its parity levels.

USD/CHF: 1-Hour Forex Chart
USD/CHF: 1-Hour Forex Chart

I saw an opportunity to enter at market when I saw USD/CHF approach the rising trend line support AND the 100 SMA on the 1-hour chart. It also didn’t hurt that Stochastic was almost at the oversold region.

Since I promised to take more trades in my 2015 reflection, I decided to enter at market (1.0043) with a 100-pip stop. I figured this would place my stop to just below parity and the 200 SMA. Not only that, but it’s also half of the weekly ATR for the pair. I haven’t exactly pinned my profit targets yet but this week’s highs look good as starting points.

Here’s what I did: Bought 0.5% worth at 1.0043 with my SL 100 pips away at .9943.

I’ll check today’s volatility and determine if I can lock in some pips before tomorrow’s NFP report. Meanwhile, I got my eyes on possible profit targets.

What do you think? Do you have any tips on how to handle these kinds of market-entry trades?

XOXO,

Huck
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This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.