CPY/CHF potential long trade

Randy BalcomTradesLeave a Comment

This trade is based on a recent oversold daily chart and 1 hour chart in the CHF/JPY pair. On the weekly we have a wedge shape developing with open room above.

On the daily, similar situation, pullback into a longer term trend. HOWEVER PRICE IS MODERATELY OVER BOUGHT AND THE MOST RECENT HIGH WAS NOT PENETRATED. 

The hourly is developing a double bottom and if price holds, a trade should develop above 110.696.

Classic Reversal Pattern

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Here is an example of a reversal pattern with the complete methodology

Think of this trade as an “If-Then”.

  • Weekly charts are used for the big picture. Trend, overbought/oversold and near support and resistance levels
  • Daily is the trade signal
  • 4 hour is for fine tuning the trade

What does the weekly say?

Price is oversold based on the MACDBB

Weekly Chart

What does the daily say?

  • We have a blue square above= Long Dynamic Zone
  • We are showing a potential long trade with a pull back into the sweet spot.
  • MACDBB is below 0= Trade has room to move
  • Ideally, we would want price on the daily to find a bottom around .87152
  • The trade would then be a buy order above .88015 with a stop below the pullback and a target of .90062
  • Ideally it would then be a 2:1 trade
Daily Chart

The “If-Then” part of this trade is:

  • Price has to hold above .8715 for the risk to reward to be close to 2:1
  • There needs to be a clean pullback on the daily
  • Price does not stall out. It makes a clean pullback and a move back up to the entry level

If any of these things are false, skip the trade!


Randy BalcomTradesLeave a Comment

If price holds below .89291, then we have a legit double top on the daily chart.

Entry below .8838

Stop above .89291

Target Above .87068