Trade Example – AUD/CHF

Filed under: Learn Forex Trading |

Since we didn’t send out any live trade alerts yesterday, I would like to run you through one of the trade setups that we missed. It is a trade on the AUD/CHF forex currency pair, which is the pair for the Australian dollar and the Swiss franc. It is not one of the major forex pairs, but that does not make the trade setup any less valid. The spread is reasonable so there is really no reason not to trade the lesser popular pairs such as this one.


Figure 1.

If you look at Figure 1, you will see that the AUD/CHF pair is moving sideways. The 8-day EMA is still crossed over the 21-day EMA, so technically we are still in a bull trend. However, that momentum is starting to wane and I would say that the trend is only slight up to neutral. There is also a very strong level of support/resistance that price is having trouble breaking through once again. I didn’t take this trade because the trend is slightly up and I don’t like to go against the trend, however, in hindsight, this was a very strong level.


Figure 2.

If you now look at Figure 2, you will see that this level has been very well respected on the 1-hour chart for the AUD/CHF pair. It acted first as resistance, then as support, and now resistance again in yet another change of polarity. A very nice bearish engulfing pattern formed at this level, and we could have taken it with a risk-reward of 1:3. Figure 3 shows that such a trade would have been successful, with price subsequently moving down. However, we will have to put this one down to a missed opportunity. In a 24-hour market, we can’t expect to get them all, so we mustn’t beat ourselves up about it.

Figure 3.

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