No luck on getting an additional pullback to get in my full long position on USD/CHF, but the good news is that my max target was easily triggered as the Dollar marched on higher to close my half position for a fast profit. Here’s as quick review.
USD/CHF Uptrend Play
Last week, I decided to play the momentum in U.S. dollar strength by scaling into a long position in USD/CHF. Well that momentum did continue after entering with half position at market (0.9605), so I didn’t get the pullback down to my second buy order at 0.9505 to get into a full position. Actually, that momentum was strong enough to push USD/CHF up to my max target at 0.9800 to close my half position with a solid return-on-risk:
Total: +195 pips / +0.43% gain on 0.50% max risk
Overall, this was a great trade, although as we can see in the chart above, I probably should have went with the full position at market given the intensity of the U.S. dollar funding crisis and strong momentum in price. But these are crazy, unprecedented times and it’s a good idea to be prudent when managing risk, so I don’t feel bad at all about just having half a position on, because it could have easily gone the other way with a surprise news event.
Since then, USD/CHF has been stuck in the range, likely on the fact that the Federal Reserve has brought out the big bazooka to tackle financial market liquidity by pledging no limit to their support. So, I have no bias for now on the U.S. dollar, but I will certainly watch this consolidation for a break out to then re-assess and take action if needed.
Stay tuned for that potential idea to come, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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