When reviewing currency pairs in this blog, my focus is always directed to the currency pairs which have a (potential) trade setup either right now or sometime soon in the future. Obviously giving warnings for high probability trade setups beforehand has the most value for the readers of our blog.
Finding the best currency pairs and trade setups for each of my blogs sometimes goes quick and sometimes takes very long, which is not surprising when scanning through some 20-25 currency pairs on a daily basis. After this process is completed I choose the best 1, 2 or 3 pairs and show you the end result. But as you can imagine, many currency pairs are skipped and not presented to you – or in other words they are filtered (read here for more).
Today’s blog post is focusing on the currency pairs that I usually skip because the market environment is not as great as with other currencies. Can we still find interesting setups on less interesting pairs? Or is it indeed better to skip these pairs? What kind of trade setups could we possibly detect? By the way, yesterday’s article already discussed the process of taking a random currency pair and completing it step by step.
NZDCHF MESSY CHART
One of the messiest charts I encountered is the NZDCHF weekly chart. Usually speaking I would take a quick peek at the other time frames but it is a typical chart that I would skip in search for better trading opportunities in the Forex market. Here are my main reasons for skipping this chart:
- A 1000 pip range on the weekly chart is a tight consolidation;
- There is no clear strong trend present;
- There is no obvious or interesting candle stick pattern occurring;
- Price does not seem to be at a major decisive bounce or break spot.
Good reasons to move on to another chart and find opportunities there.
Or do you disagree?
Let us know down below in the comments section what you think!
SETUPS DESPITE THE ABOVE?
Are there any trade setups despite the lack of any interesting opportunity? Perhaps yes.
- The question of whether the trade is worth the pursuit really depends whether the other setups of the day are better or not. Obviously we want to risk part of our trading capital in trades with the highest probability spots.
- But let us assume that we only trade the NZDCHF and nothing else, then could we find a trade setup? Probably yes! Remember traders create a bias in their analysis and eventually find enough supporting evidence to take a trade.
There could be evidence for a long for instance.
- Price is near the bottom of the channel line (dark red line);
- A big candle wick confirmed the line (purple);
- After a consolidation (orange box), price was not able to push through the support trend line;
- Two bullish candles (green arrows) broke above the consolidation (orange) and made higher highs and higher lows.
From a weekly candle stick perspective, the current retracement could be a spot for a long entry with a stop loss below last week’s low and a target at last week’s high.
As you can see, there are many setups out there. Even when looking at weekly candle lows and highs. Be cautious and choose the setups with the highest probabilities.
What do you think of the setup?
Do you think the trade has a high win chance?
Let us know down below!
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