Monday, June 28, 2010

USDCHF—at support

Friday I was long USDCHF which stopped at breakeven. The pair has reached a low so far this morning of 1.0828. I just went long at 1.0847. The reasons I went long are that the pair is at key support. There is a weekly uptrend line coming in at 1.0870, a daily uptrend line coming in at 1.0806 and the 1.0805/12 zone is polarity. My 3-hour point and figure chart (P&F) also shows good support in the 1.0850 area. There is also positive divergence on the three-hour chart.

Obviously the pair needs watching and just as obviously a tight stop is imperative. The next major support is at 1.0747. Also troublesome is that on the P&F chart, the pair has broken below the 45° trend line. If it gives a sell signal in the next couple of hours I'll consider going short.

Here's a look at the three-hour P&F chart. I keep these for most of my pairs on a daily, 3-hour, and sometimes hourly basis. They can be very useful in removing noise from price action and can help in calculating price targets.














© 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.

No comments:

Post a Comment