The Daily Trade – Day 86

Filed under: Learn Forex Trading |

Trade Number 86 – GBP/CHF 1-Hour Chart

There was a nice trade setup on the GBP/CHF forex currency pair yesterday, which I actually missed – so I would like to talk you through that just now.

 

Figure 1.

If we begin by taking a look at the daily chart (see Figure 1) for the GBP/CHF forex pair, you will see that price had been hovering around a very strong area of support/resistance that had been firmly respected on at least three occasions in the past ten months or so. This area is marked in on the chart with a green band or “zone”. This zone first acted as support, and then, in a change of polarity, it became resistance, and more recently, price broke through this resistance and it became support again (that was a mouthful)! This zone was a good area to be looking out for any price action signals on the daily, 4-hour, and 1-hour charts.

 

Figure 2.

Now, take a look at Figure 2 and you will see that a very nice bullish engulfing candle emerged on the 1-hour chart for this pair at our zone in question. This would have been a good place to take on a long trade with a stop loss just a few pips below the low of the move. A risk-reward of 1:2 would be sufficient here, so if you risk 1% of your bank, your target is 2%.

 

Figure 3.

If you take a look at Figure 3, you will see that price did indeed enjoy a nice bounce off of this level and your target would have been comfortably met for a 2% rise on your bank. That’s all I have for you today – so I’ll be back tomorrow for yet another forex trade example. See you then.

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