AUD/CHF forex trend following trade idea: How to play the long term trend accelerating lower

Introduction

VolatilityMarkets Trend Following Trade.

According to AQR the quantitative hedge fund and Yale University, over the past 100 years markets moved in trends. Trends are successive upwards and downwards movements in price that occur at a greater frequency than would be predicted by randomness alone. The following trade idea is a trend following trade idea which takes the assumption that the market will continue moving in the way it has over the previous sessions. Trend Trading, however is different than scalping due to the time horizon of the trade as trend following trades will take a week while scalping is done on a daily or intraday basis.

Market summary

Price

AUDCHF last price was $ 0.605247.

Trend analysis

In the short term AUDCHF has been accelerating lower. In the long term AUDCHF has been accelerating lower.

Value analysis

Over the past 20 days, the AUDCHF price increased 4 days and decreased 16 days.

For every up day, there were 4.0 down days.

The average return on days where the price increased is 0.7387%.

The average return on days where the price decreased is -0.3723%.

Performance

Over the past 20 Days, the price has decreased by -3.0% percent.

Over the past 20 days, the average return per day has been -0.15% percent.

Trade idea

Taking into account the long term trend accelerating lower, we propose a short trade idea with time horizon..

Trend trade idea

Sell $ 385,081 AUD, or 3.85 lots of AUDCHF, take profit at $ 0.6037 level with 25.0% odds for a $ 997 AUD gain, stop out at $ 0.6107 with 49.97% odds for a $ 1,000 AUD loss through a one Week time horizon.

Intraday predictions

AUDCHF last price was $ 0.605247. The short term trend accelerating lower is stronger than the long term trend accelerating lower. This trade goes short when the last change was lower and accelerating.

AUD/CHF trend analysis

AUDCHF last price was $ 0.605247. The short term trend accelerating lower is stronger than the long term trend accelerating lower. This trade goes short when the last change was lower and accelerating.      

AUD/CHF value analysis

Over the past 20 days, the AUDCHF price increased 4 days and decreased 16 days. For every up day, there were 4.0 down days. The average return on days where the price increased is 0.7387% The average return on days where the price decreased is -0.3723% Over the past 20 Days, the price has decreased by -3.0% percent. Over the past 20 days, the average return per day has been -0.15% percent.

AUD/CHF worst/best case scenario analysis

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for AUDCHF, is $ 0.589339, and the best case scenario overnight is $ 0.621155. levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that $ 0.6107 could trade and that $ 0.6037 could trade. These levels are within statistical probability.

Expected range

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for AUDCHF, is $ 0.589339, and the best case scenario overnight is $ 0.621155. levels outside of this range are unlikely, but still possible, to trade.

We are 50% confident that $ 0.6107 could trade and that $ 0.6037 could trade. These levels are within statistical probability.

Probability Vs Payout Chart:

This graph contrasts the percentage payout of holding a position vs the probability that the payout occurs. The red and green columns represent the probability of stopping out and taking profit and their associated payouts.

Key Takeaways:

• Price today $ 0.605247.

• Over the past 20 days, the AUDCHF price increased 4 days and decreased 16 Days.

• For every up day, there were 4.0 down days.

• The average return on days where the price increased is 0.7387%.

• The average return on days where the price decreased is -0.3723%.

• Over the past 20 Days, the price has decreased by -3.0% percent.

• Over the past 20 days, the average return per day has been -0.15% percent.

• Over the past 20 days, The price has on average been accelerating: 1.7616 pips per day lower.

• Over the last session, the price decreased by -36.88 pips.

• Over the last session, the price decreased by -0.6093 %.

• Over the last session, the price accelerated by 3.1 pips.