[TW] 6-3-2011 – USD/CHF (Long) by monstapips

[monstapips]

USDCHF | Daily


Long or Short: Long

Entry Point: TBD – still waiting for a reversal candlestick. Ideally I would like to enter around .8620,

Stop loss: .8510– below recent lows

Profit target: .8930

Risk Percentage: 0.50%

Reward-to-risk Ratio: Roughly 2.7:1

Indicators used: RSI

Trade Rationale:

The franc is really, really, really strong right now, but I do think the move may be overdone and we could see a retracement soon. I think we could see a double bottom form at .8560. RSI is also almost below 30 so we might see a reversal soon. I am just waiting for RSI to go below that level, or for a reversal candlestick to form before I go long.

Because this is a contrarian trade, I will only risk 0.5% of my account. If it shoots up, I stand to make about 1.35%, which isn’t so bad.

Trade Adjustment:

If the dollar manages to make a nice rally next week, I would consider holding onto this position for the long haul and see if the pair can break above resistance at .8935.

[AndreJ85]

One thing you may want to watch out for is the QE3 situation. I am new to forex, but if there is no clear rejection of a possibility of QE3 in the coming week or so and rumors persist, would that not have a pretty significant effect on this pair, considering it would be bearish on the USD and cause the Swissy to rise, given its safe haven quality? Just a suggestion.