Right now we have a great trade opportunity set up on the gbpchf currency pair. In this trade setup, yesterday’s candle closed at the top of the range with a very long spike to the topside. Today’s candle, though not yet closed is looking extremely bearish. It went back for a test of the 1.7070 resistance area, and is now falling back quite heavily.The daily chart below has the range drawn in with red horizontal lines. The trading strategy for this setup is the same as when trading smaller ranges. The stoploss, and targets are just more significant. My target for profit is 1.6450, close to the bottom of the range. A wide stop is required, so I have mine placed at .7100.
When trading a range of this size, (over 500 pips), it is important to know how to manage the trade properly. There will tend to be a lot of spikes, and whippy movements sometimes, but everything should be fine, as long as you have an appropriate stop out of the way of the market. I sometimes enter with a smaller position initially, to run the duration of the trade, then look to day trade the additional swings I get while the market remains inside of the range.
Patience is required, and this is a great opportunity if you would like to work at staying in your trades for longer durations.
Thanks for Reading, and Successful Trading to You!
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