After a strong pop higher, I’m making a quick adjustment to my NZD/CHF long position to reduce risk and increase my max profit potential.
NZD/CHF Long Setup
Last week, I decided to scale into a long position on NZD/CHF to play my bullish fundamental bias on the Kiwi relative to the Swiss franc.
My first order at 0.6000 was triggered soon after, but unfortunately, my second order to buy at 0.5930 was left behind as the following pullback wasn’t quite enough to get me in with a bigger position.
This week, it looks like the “reopening trade” (rising positive global risk sentiment as economies end lockdown) is continuing to work nicely, enough so that the comdolls just saw a nice pop higher against the safe haven currencies once again.
With no major catalysts on the calendar for either currency for the next couple of weeks and the “reopening trade” likely to continue, I think the odds are still in favor of the bulls and that a bigger pullback is a low probability scenario for now.
On that, I decided to cancel my buy orders at 0.5930 and roll my stop up from 0.5860 to 0.5930. And given the strong momentum, I’ve also rolled up my max target from 0.6200 to 0.6300 to increase my max return on this smaller position size.
With these adjustments, my new risk is -0.07% if my new stop is triggered, and my max gain is about 0.97%. If NZD/CHF continues higher, I will look to roll up my stop further and possibly add on to the position to increase my max gain.
What do you think about these adjustments? Should I have added to the position now rather than later?
Let me know in the comments section below, 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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