Monday, January 4, 2010

EURCHF—interesting only in that it’s dropping

This pair is interesting only because it has been dropping. For most of 2009, the Swiss National Bank (its central bank) has been intervening to prevent the Swiss franc from gaining against the Euro. For example, in March the bank intervened after the dropped to 1.4578 and it seems to have intervened twice since then, both times around the 1.50 level. However, in December that seems to have changed when it clearly dropped below the 1.50 level. I shorted at 1.4928 and this morning the pair dropped to 1.4812. Has the central bank given up? Or are they just holding off to see what happens? In any case, my short is profit stopped. After the current price, support levels are at 1.4752 and 1.4578. If they do intervene again, the pair will shoot up fast. Here’s the daily chart:

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

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