Trade Example – USD/CHF

Filed under: Learn Forex Trading |

We currently have two live trades in the market, one of which has locked in 0.6% profit and is still running (gold), and the other is close to moving to breakeven at just under one times our risk (AUD/JPY). So, in absence of any concrete results to tell you about, I will again run through one of those trade setups that we unfortunately missed.

 

Figure 1.

This time, the trade in question comes on the USD/CHF forex currency pair, which is the pair for the United States dollar and the Swiss franc. If you look at Figure 1, you will see the daily chart for this pair. What you will see is that the pair is in a bear trend with the 8-day EMA crossed firmly below the 21-day EMA, and the chart visibly moving down from left to right. You will also see that the pair consolidated a little bit in a box range for a while, before continuing the move back down. I have highlighted a possible entry here, which was an inside bar at the lower level of this box range, which was acting as resistance. If we had gone short at the break of the low of the mother candle with a stop loss just a few pips above the high of the mother candle and a target of two times our risk, we would have made a nice profit.

 

Figure 2.

Figure 2 shows that we could have also entered this market on the 4-hour chart. The inside bar setup looks even more pronounced here, with the mother candle containing no less than twelve inside bars before it broke out! Again, we could have gone short on the break of the low of the mother candle with a stop loss a few pips above the high of the mother candle and a target of two times our risk.

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