Where to Place your Buy Order on the GBP/CHF

Lately, I have been discussing the GBP/CHF quite a bit during my End of Day recap.

The reason is that I really like the strong uptrend we’re seeing across multiple different looks and time frames (see article here for more info) and so I am eager to take advantage of possible continuation.

However, one of the Golden Rules in Forex Trading is NEVER chase a trade… So that means we need to continue to wait for this GBP/CHF to come to us before we buy in.

I discussed the steep trend line on the daily chart last week, but from all appearances, the GBP/CHF is not intending to correct that deep.

Fear not! There is another entry point that offers great Risk to Reward and a healthy probability that we’ll be entering in at the right place.

Remember, this is what GBP/CHF looks like on the longer time frame:

gbp_chf_april_23_1

 

As we zoom in to see what the recent move has done, there is a great confirmation of upward potential:

gbpchf_1_april_29

What we see here is a VERY strong break after some counter trend consolidation. This has the making of a Bullish continuation leg on the longer time frame.

Better than just a confirmation point, this recent move gives us a place to enter with a high Reward and low Risk trade.

Using a simple Fibo on the breakout move, we can see where some good entry areas might be to get a better price and increase R/R:

gbpchf_april_29_2

Here, you see that recent tops and the breakout point itself correspond perfectly with our 50.0 Fib retracement level.

For me, this represents the perfect area to place a buy order because it combines strong confirmation points and a much better price than what we could get into now.

A stop below the consolidation period gives us some protection from a deeper correction or choppy movement.

By place our intended levels using the EPIC Trade Management Tool, we can determine what the potential PROFIT vs RISK will look like if we get this trade to come to us.

gbpchf_april_29_3

 

As you can see, I have used our custom tools to “Set Up” the trade ahead of time so I know what kind of profit potential is on the table.

In this case, if we’re able to catch the GBP/CHF as it runs toward the daily high, I have about 10,500 USD in potential profit compared to $2,600 in potential risk; so this is a trade I am happy to take.

Look forward to your thoughts below! And fingers crossed for this pair to behave!

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  • Clement

    Thanks Nathan. Nice call there. It went up to 1.48799 (+55 pips), and has since hit our adjusted SL @ 1.48053 (- 20 pips). So, where do we go from here with this pair?

  • NathanTucci

    Hello SNIPER! Which fib are you referring to? From the daily downward move? I do see some action on the 50 there that could confirm a bullish continuation… I am certainly hoping it does not move any lower 🙂 … I will discuss the USDCAD at EOD today

  • NathanTucci

    Hey, thanks for the comment.. I agree there is something to be concerned with there, but this is one I mark up to “no trade will have zero obstacles” and also the idea that we are moving in a pretty strong uptrend, and what do trends do? They break levels… So, I agree it could spell trouble, but I am willing to take the risk because of the R/R potential. I will keep my fingers crossed, thanks for the comment!

  • aristides

    Hello Nathan,
    Just a thought, looking at the weekly chart, you’ll most likely meet strong selling if the triangle doesn’t break upwards. The weekly triangle is quite compressed (100ma and 200ma are tightly together also).

    thanks,
    -devil’s advocate.

  • Fxsniper

    Nice. I have been following too. Did you notice that it already bounced strongly off the Day 50%fib? I was waiting for a deeper correction into the 61.8 and I am still willing to wait. The corresponding price would be 1.4735 area. Do you think it could move that much lower again? And what about the USDCAD you discussed the last time. I now entered at 1.0953. What do you think of that too? Cheers!