CHF: Will Bearish Channel Hold Further Up Moves?

Sunday, July 8, 2007

CHF: Will Bearish Channel Hold Further Up Moves?

(CLICK ON THE CHART TO ENLARGE IT)
Apparently so. Bearish Channel identified by the yellow lines was broken on June 08th just to see the prices to penetrate back into it on June 29th. Now we also have a nice bullish channel identified by the red lines that was also broken on the following day, July 02nd. Now question is: is the break of the bearish channel on June 08th a false breakout, thus supporting this channel to hold further up moves, or is the break of the bullish channel a false breakout, so that prices will get back into it? The Hanging man and the shooting star formed on July 05 & 06 respectively give the bearish more room. RSI is below its moving average and, in the short-term, the 38% from fibo down move 1.2232 to 1.2158 last Friday worked well as the main retracement level at 1.2186. It pays to wait the break of the 1.2150 to get a ride in the bearish trend, probably to the bottom of the bearish channel at 1.2070 or, being more conservative, to 1.2100 (low on July 05th)

TRADING STYLE

Even though we are considered Day-Traders, our trading sometimes requires different styles, according to the patterns and/or how the market moves during our trading sessions. All strategies presented in all posts below are for Positioning but, depending on how markets behave, our style can change so that we can capture good trading opportunities......

Our Trading Styles are discriminated as below:

1) Scalping: Short-term trades, usually betwen 2 to 15 minutes, with stops lower than 8 pips, targeting 15 pips. Generally our Scalping trades apply very low stops (5 pips) aiming quick surges in prices of around 10 pips, in a matter of a very few minutes.................................................................................................
2) Day-Trading: this is our main Trading Style where we dedicate most of our time. Their lenght is usually betwen 10 to 60 minutes, sometimes for more than 2 hours, with stops between 10 and 20 pips and targets between 20 and 60 pips...
3) Positioning: Long-Term trades based on Daily and 4-Hour charts, with stops between 20 and 40 pips, targeting minimum 60 pips. Most of these trades have Open Limits......................................................

Money Management

This is a crucial aspect of our trading, considering the different styles we apply to our trading Sessions. As the Positioning Style requires larger stops (usually the double of our Day-Trading Style), their lot size is lower than usual, generally 50% of our standard lot size. As the Scalping style requires lower stops (usually half of our Day-Trading style), their lot size is usually 150% of our standard lot size. For instance: let´s suppose that our current standard lot size is 200K. For Scalping trades the lot size will be 300K and for Positioning it will be 100K...................................

Daily FOREX Analysis - Brasil

Sunday, July 8, 2007

CHF: Will Bearish Channel Hold Further Up Moves?

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