EUR/CHF Price Analysis: Long trade setup on buy limit, 1:4 R/R
|Developing story
Given that the following trade, short CHF, is now breakeven, an opportunity to short CHF again through EUR/CHF has arisen for a day trading opportunity for the sessions ahead.
In the following charts, it is illustrated that the correction of the hourly bullish impulse has decelerated and is moving in to test the upside.
Moving down to the 15-min chart, there current signs that the price is now crossing over into a bullish environment which gives rise of the possibility of a long set-up for a 1:4 risk to reward opportunity.
1-hour chart
15-min chart
With the price testing the resistance, above the 21 moving average and underpinned by bullish RSI, a buy limit order could be triggered on a pullback to structure.
Alternatively, a more expensive trade can be taken at market for a 1:3 risk to reward.
Update
The trade was taken on a buy limit higher up as there were little signs that the price was going to trigger the original buy limit.
Entry offers a 1:3.5 risk to reward ratio as stop loss was also moved up to below higher structure.
Update
The stop loss was triggered protecting against a sharp move to the downside resulting in a small strategic loss.
Losses are part of the overall strategy which is a 60/40 win to loss or breakeven system.
Author's notes
It is always worthwhile journaling your trades, especially losing trades.
- On reflection, buying at the highs, or at resistance, is never wise. However, you never can tell but playing the odds against you is a losing strategy.
- It is never a good sign if the set-up has a lack of momentum of volatility and the price drags on sideways.
- If there are correlating currencies or markets that are giving signals, in this case, the commodity complex petering out, it is worth taking note of them.
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