The Daily Trade – Day 1

Filed under: Learn Forex Trading |

So here we go then… day one of “The Daily Trade”. You often hear about how professional traders keep a trading journal of the trades that they make. This kind of retrospective analysis is supposed to keep traders focussed and help them learn from their mistakes; and that is exactly what we’re going to do here – only collectively and publicly. Every day, I will show a set-up of a trade that I have actually taken, and the following day, we will analyze the result and if it wasn’t successful, we will try to figure out if we did anything wrong. So without further ado, let’s move on to the first trade!

Trade Number 1 – GBP/CHF

FIGURE 1 - GBP/CHF Daily Chart

This trade was taken on the GBP/CHF using a 4 hour chart. However, as always, the alert came from the support/resistance levels on a daily chart (see fig 1). As you can see, there was a strong support level that was hit around nine times before breaking through. The price then retraced to the same level and retracted from it, confirming that it was a strong level. The level was also a 61.8% Fibonacci retracement level (see fig 2), so there was some confluence there. At this point, I switched to a 4 hour chart to check for any price action setups.

FIGURE 2 - GBP/CHF Daily Chart Showing 61.8% Fibonacci Retracement

A nice bearish inside bar formed on the 4 hour chart, so I put in a sell stop at the low of the mother candle, with a stop loss at the high of the mother candle (plus a few pips to cover the spread). I set my target at two times the risk (see fig 3). As long as the price stays within the mother candle, I will leave the trade on. But if it breaks through the top-side and closes there, then the trade will be cancelled.

FIGURE 3 - GBP/CHF 4 Hour Chart

For now, I will keep an eye on the trade and update you all on the result when it happens. Until then, happy trading!

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