The Daily Trade – Day 94

Filed under: Learn Forex Trading |

Trade Number 94 – USD/CHF 1-Hour Chart

I have yet another “Daily Trade” forex price action-trading example for you today. This time, it is on the USD/CHF forex currency pair, which is one of the major pairs that you can trade. The spread and liquidity is very good on this pair.

 

If you take a look at Figure 1, you will see the daily chart for the USD/CHF pair. As you can see, we are currently in a strong bull trend, so we should be looking out for any retracements back to areas of value. You will see that price has just in fact retraced to an area of support/resistance, which I have marked in on the chart with a green band or “zone”. This area has been tested and respected four or five times recently, so this is the area where we should be looking out for any price action signals on the daily, 4-hour, and 1-hour charts.

 

Figure 2.

If you now look at Figure 2, you will see that a nice, long pin bar formed at this zone, so this would have been a good time and place to take a long trade, with a stop loss placed just a few pips below the low of the move. Our target with a tight stop like this should be at least three times our risk, so that is a risk reward of 1:3.

 

Figure 3.

Figure 3 shows that the trade would have been successful. Price moved up very nicely off this significant area of support/resistance and we would have locked in a profit of three times our risk. So if we risked 1% of our bank, our bank would have grown by 3%. Well, that is all for this week, and I’ll be back next week for some more forex price action trade examples.

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