The Daily Trade – Day 39

Filed under: Learn Forex Trading |

Trade Number 39 – EUR/CHF 1-Hour Chart

Good morning everybody. I have another successful Daily Trade to show you today, and this time it is on the EUR/CHF forex chart. This is not one of the most popular pairs to trade off, but personally, I like to look for trade setups on all the forex pairs as they are all very liquid – and I have never had any trouble getting my orders matched – unlike some of the small cap stocks that I used to trade on the stock market.

Figure 1.

 

To begin with, take a look at Figure 1., which shows the daily chart for the EUR/CHF pair. You will see that I have drawn in a support/resistance zone (marked in green with a thin red line in the middle) at a level where there was a market gap up. By this I mean that the candles do not connect, so the opening price was much different to the previous candle’s closing price. When there is a market gap up like this, it very often acts as a very strong support zone, so therefore I was watching this zone very closely for any price action signals.

 

Figure 2.

If we now look at Figure 2, you will see that on the 1-hour chart, there was a nice bullish engulfing pattern right in this zone. You could have taken a long trade at this point, and had a stop loss just below the low of the engulfing candle, and you could probably have gone with a risk reward of 1:3, as the next resistance zone was quite a distance away.

 

Figure 3.

In Figure 3, we fast forward twenty-four hours or so. You can see that there was some volatile price action that moved in our favor quite dramatically, and we would easily have hit our target for a 3% rise on our bank, for a very nice profit.

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