Live Trade – USD/CHF

Filed under: Live Trades |

I had a trade yesterday that just did not come off I’m afraid. However, as always, as a matter of course, I will talk you through this setup right now.


Figure 1.

To start with, take a look at Figure 1, which is the daily chart for the USD/CHF pair (the forex currency pairing for the United States dollar and the Swiss franc). What you can see here is that there is a good deal of bearish momentum, with the 8-day exponential moving average crossed below the 21-day exponential moving average, and the chart visibly moving down from left to right. The chart seemed to form a bottom (marked with a green horizontal band) for six days, before breaking through that bottom. Price then formed two bearish pin bars that penetrated and rejected this previous area of resistance, which looked like a new support level. It was at the close of the second pin bar that I put an order in to go short at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the pin bar, and a target set of two times my risk. As you can see, this order was filled and I was quite optimistic about it.


Figure 2.

However, Figure 2 shows what has happened since. Price has blasted upwards, probably on the back of some fundamentals news. Our stop loss has been hit for a 1% loss on our bank. Although this looked like a decent looking setup, unfortunately, this is one of those that simply did not come off. Whenever we make a loss, we must remind ourselves that this is a part of the process of winning, and that trading is a game of probabilities rather than certainties. I will leave you with that today, and I’ll be back on Monday with yet more forex price action trade examples.



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