USD/CHF – Playing the Waiting Game…

Filed under: Learn Forex Trading |

At the moment, not many trades are setting up and we are having to play a bit of a waiting game. This is particularly evident on the USD/CHF pair. If you take a look at Figure 1, you will see what I mean.  As you can see, the pair is making new six-month lows, and price has recently broken through a very strong level of support/resistance. The pair is currently very bearish, with the 8-day exponential moving average crossed well below the 21-day exponential moving average.

Picture 2

FIgure 1.

With the price action forex trading strategy that we employ (mainly looking out for price action signals that confirm the trend and react to significant levels of support/resistance), what we are now doing is waiting for any retracements back up to the level of support/resistance, and to watch out for any price action signals (in the form of a pin bar or engulfing pattern for example) that might occur at this level.

 

If a price action signal did form back up at the level of support/resistance, and was seen to be clearly reacting to it and confirming the bearish trend, I would put an order in, with a stop loss just above the high of the move, and a target of at least two times my risk. By being patient and only taking the very best setups, we are giving ourselves a much higher probability of success. Overtrading the forex markets can be very detrimental to your trading account, but sitting on the sidelines is something that is easier said than done, and many novice traders find this a very difficult thing to do. However, many professional forex traders do not trade too often and do spend a lot of time waiting and watching the markets; and it is a strategy that could well do a lot to improve your bottom line profit/loss figures.

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