Beautiful session for trading!!! I was busy with the CHF, JPY and NZD. A EUR trade was the inverse of the CHF. I will show the CHF below as it was very easy to see the setup and execute. The other majors aligned beautifully, so it was a day of harmony and perfect symmetry. As a trader if you know how to spot and execute this trade pattern alone, the rewards can be considerable. It’s better to have several high probability trade setups to capitalize on because the market delivers different setups throughout the month and lately trading has been quite tricky and sedate.
The CHF set up for a short after the 1st round of US economic news. As it had exceeded its range significantly in the first half of the UK session, I look for a reversal not a continuation. Price showed signs of weakness enabling a 19 pip stop loss above structure, for a potential 59 pips to the Asian low. Once the US session is underway, I will take a 2:1 R/R, whereas in the first half of the UK session, I hunt for a 3:1 R/R.
As price drops, we are able to move our stop loss to positive territory in advance of the second round of US economic news. When the worst case scenario is you make only a few pips… it’s really not that bad at all and we call it “stress-free trading”. The idea is never to be greedy, always always always trade with an emergency stop loss, never take large stops ( your pockets are not as deep as an institution’s ), protect profits when you’re trade is positive, and always be aware of potential volatility due to major economic news releases.
The CHF continued down after the Philly Fed M.I. and we continued to lock in profits as price headed lower. The pattern completes and we exit after noting the buyers entering where institutional longs would first defend their positions today.
A day like today with any one trade can make your week. If you had nimble fingers and could trade more than one pair… even better! This comes with experience. The important consideration is to not to over-trade or over-leverage. Keep your potential risk of capital loss very small!
Good luck with your trading!
Back tomorrow if we find a trade.