anyone has experiences trading the EUR/CHF?

[walkonwallstreet]

do you think the pair will constantly keep breaking record high? and possible range trading later on next year?

thank you

[gobreeze]

I've been trading it short term for a time. From my charts...it should range. Hard to tell. It all depends on how hawkish the ECB remains. Recommend trading the shorterm trend with close stops.

[walkonwallstreet]

Originally Posted by gobreeze

I've been trading it short term for a time. From my charts...it should range. Hard to tell. It all depends on how hawkish the ECB remains. Recommend trading the shorterm trend with close stops.

im hedging EUR/USD and USD/CHF, so as long as EUR/CHF remains hawkish or relatively constant(range), i can be profitable. the bad side is that when EUR corrects againest the CHF, like the one happened feb 07, aug 07 and nov 07 i will very likely to get margin call or a huge equity down, like 70-80%...

i hope it will break another record while it ranges.

[gobreeze]

Margin calls and anything over a 5% drawdown are very bad! Please be careful my friend.

ECB may be talking tough now but that may change quickly. My charts tell me that the EUR/CHF will decline in the coming weeks. Current strength is a short term retracement. Hope this helps.

Also...keep in mind that the EUR/CHF is considered a "carry trade" which has correllated with equity markets this year.

Happy Trading!

[walkonwallstreet]

Originally Posted by gobreeze

Margin calls and anything over a 5% drawdown are very bad! Please be careful my friend.

ECB may be talking tough now but that may change quickly. My charts tell me that the EUR/CHF will decline in the coming weeks. Current strength is a short term retracement. Hope this helps.

Also...keep in mind that the EUR/CHF is considered a "carry trade" which has correllated with equity markets this year.

Happy Trading!

gobreeze, thanks for the quick reply...

could you post a screenshot of your tech analysis? because on my chart the EUR is rebounding to another new high. i can send u a screenshot when i got home.

[gobreeze]

Here you go.

Trend line held at 1.6300 (Support). Key resistance is at about 1.6630. I think it ranges between these levels for now.

[pipbull]

Originally Posted by gobreeze

Margin calls and anything over a 5% drawdown are very bad! Please be careful my friend.

ECB may be talking tough now but that may change quickly. My charts tell me that the EUR/CHF will decline in the coming weeks. Current strength is a short term retracement. Hope this helps.

Also...keep in mind that the EUR/CHF is considered a "carry trade" which has correllated with equity markets this year.

Happy Trading!

I agree that margin calls are bad but i disagree that anything over a 5% drawdown is bad. Actually, if a trader can achieve a decent return by year end and all he had to tolerate was even 10% drawdown, then i suggest that it's just fine.

Also, how do you explain the top notch performance of some of the best trend followers in trading history?? If you look back at their performance records you will find that drawdowns of over 25% are quite normal but still somehow manage to maintain phenomenal records over time. How is that bad??

In the end what makes a drawdown bad?? This is largely personal taste but i contend that it would depend on your overall system and what kind of drawdowns your testing shows. You have to take it in context. In other words, if your testing suggests that you never experienced a drawdown of more than 5% over a large sample size of trades, then maybe more than a 5%drawdown in that sense is bad.

If it leads to margin calls then sure it's bad.

Anything over 30% is also mathematically much harder to make back so maybe that's bad too. But 5%??? C'mon...give yourself a little wiggle room

[tonymand]

Agree with pipbull and if you have a system with a drawdown less than 5% lets see it. Of course drawdown is a function both of the system and trade size so from the perspective of the latter and knowing the former you should be able to manipulate a drawdown into your comfort zone. This is the reason for trading a 1% risk model on the MACD contrarian which historically would then contain the drawdown to a maximum of 17% based on the last 6 yrs (though never underestimate the markets ability to floor you with new and usually adverse performance characteristics)

[gobreeze]

My bad...I should have said a "5% draw down on one trade is bad."

[gobreeze]

Originally Posted by walkonwallstreet

im hedging EUR/USD and USD/CHF, so as long as EUR/CHF remains hawkish or relatively constant(range), i can be profitable. the bad side is that when EUR corrects againest the CHF, like the one happened feb 07, aug 07 and nov 07 i will very likely to get margin call or a huge equity down, like 70-80%...

i hope it will break another record while it ranges.

walkonwallstreet,

The corrections you are concerned about in Feb, Aug, and Nov of this year all deal with risk aversion and carry trade sell off. Each of these sell offs were fast and furious. I remember watching the EUR/JPY sell off 200 pips in 2minutes only a few months ago. A short squeeze like that only show up as a long candle on the chartsduring a back test, but it is the reality of this market since Aug of this year. Just yesterday the GBPUSD had a range of 200pips in 45 minutes. When fear and greed hit the market it can be ruthless...and sometimes unpredictable.

If you are risking the majority of your account on the "hope" that the EUR/CHF makes new highs then you are foolish. You are overexposed to the crazy forces that define today's market. Please take some profit off the table and learn risk management. The price action in the last two days have worked in your favor (I think) and proved me wrong from Monday. That's great! I picked up 43 pips today on this pair trading against my analysis from Monday. But that could change so fast. You really have to pay defense in this game.

I hope your trade works out well and you make some $$.