The Daily Trade – Day 44

Filed under: Learn Forex Trading |

Trade Number 44 – GBP/CHF 4-Hour Chart

Hello. I’m back again with yet another in our series of “Daily Trades”. Today, I have a nice neat trade on the GBP/CHF 4-hour chart. This setup is very similar to the setup that we had on the USD/CHF chart a couple of days ago, which is still as yet to reach a conclusion. However, this pair had reached a conclusion quite nicely, so let me talk you through it.

 

Figure 1.

Take a look at Figure 1. and you will see the daily chart for the GBP/CHF pair. You will see that price was approaching a green zone, which I had drawn in to mark a previous area of support/resistance. There also happened to be a 61.8% Fibonacci retracement area at this very same level – so there was some confluence at this area which is always a good place to watch out for any price action signals on the daily and intraday charts – namely the 4 hour and 1 hour charts, as anything less than this can be unreliable.

 

Figure 2.

If you now look at Figure 2., this is the 4-hour chart for the GBP/CHF pair and you will see that a very nice bearish engulfing pattern emerged right at this zone after a little pin bar. This was a very nice looking setup and you could have gone short at this point with a stop loss just a few pips above the high of the move, and a risk reward of 1:2. Once you’ve set a trade, I find that it is better to try and forget about it and let it reach a conclusion on its own.

 

Figure 3.

If you now look at Figure 3., you will see that this trade would have hit our target very nicely for a 2% rise on our bank. That’s it for today – more tomorrow. See you then.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>