The Daily Trade – Day 63

Filed under: Learn Forex Trading |

Trade Number 63 – USD/CHF 1-Hour Chart

I have just reached my take profit level on the USD/CHF chart, and a very nice trade it was too. The USD/CHF pair has been moving up recently in a very nice bull trend, so I have been looking for any pullbacks to significant areas for any long trade opportunities.

 

Figure 1.

If you take a look at Figure 1, you will see the uptrend that I am talking about. Price had reached an area that had gone from being resistance to being support in what we call a change of polarity, so this was a very good “zone” (marked in green) to be looking out for any price action signals.

Now, take a look at Figure 2 and this is the 1-hour chart for the USD/CHF forex currency pair. What you will see is a very sharp move down on the 1-hour chart, followed by a very nice looking bullish engulfing pattern. What this kind of pattern tells us is that the recent market sentiment might be about to change. In other words, the probability of a market turn has increased. As trading is a game of probability, if probability is on our side, however slight that edge may be, then we will come out on top in the long run if we manage our money and limit our risk well. A long trade could have been taken here with a stop loss just below the low of the move and a target of at least two times our risk.

 

Figure 3 confirms that we are right on this occasion, and a 2% rise on our bank is a very nice outcome. If you are interested in this kind of trading methodology, then why not come back tomorrow and read another, “Daily Trade”.

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