Trade Example – AUD/CHF

Filed under: Learn Forex Trading |

I have a trade example for you today on the AUD/CHF forex currency pair, which is the exchange rate between the Australian dollar and the Swiss franc.

 

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the AUD/CHF pair, and it is the only chart that we will need to use for this particular forex price action setup.

 

Before we do anything else, we must first assess the trend. As you can see, the chart is quite obviously visibly moving up from left to right. We can also see that the 8-day exponential moving average is crossed above the 21-day exponential moving average, and if anything, these EMAs are moving even wider apart. All of this tells us that the pair is in a strong bull trend, and as a result, we are better to be looking out for any price action signals that confirm this bullish momentum. If we trade with the trend, we have a much better chance of success.

 

Next, we must take note of any significant areas of support/resistance. I have marked in an area with a thin red horizontal line, which was an area that has previously been respected. As you can see, price formed a nice inside bar setup (highlighted in yellow) right at this previous area of support/resistance. This would have been a good time to put an order in to go long at the break of the mother candle of the inside bar, with a stop loss just a few pips below the mother candle, and a target of two times our risk.

 

As you can see, this pair continued to move up and we would have been successful in our trade for a 2% rise on our bank. That is all for today – and I’ll be back with more tomorrow.

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Your email address will not be published.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>