So far this week to date Swiss Franc has taken a lot of room in this blog. In fact, it was traded even more extensively. Following set holidays, like Thanksgiving or Christmas, there are days of increased volatility. Very often I try to play it using USD-CHF, which tends to move after these kind of slow days. Typical approach is to place a straddle outside a narrow range, simply looking for a breakout either way. This was demonstrated here on few occasions before, like the Thai Baht post after Easter.
When I was writing my Monday post, prices were a little more active than anticipated, and no range was defined yet. I decided to wait until before European open on Tuesday and use the last 12 or so hours to define the range, or zone for the price to move out of. After all, US markets were closed on Monday, so volatility dropped to almost nothing after morning. Entire afternoon was enclosed within 20 pips, or less. Dead. I still had to include the low established in the morning, in case it created a support, but even then area of interest was about 50 pips wide. Buy and sell orders were placed respectively just outside the boundaries.
Franc didn’t disappoint and started to move. Well, maybe it was the Dollar moving, because it plummeted against all currencies and CHF was one of the beneficiaries. I had no set target, but closed the trade right after Kiwi post yesterday. It produced 91 pips gain. Very good result for a simple play. This happens very often after holidays. Not all the time, but often enough to give it a try. And I use the Franc not because it is necessarily the very best currency for it, only because it is most comfortable for me. I used to trade USD-CHF exclusively when first started Forex adventure, so have most charts, data and experience with this pair.
At about the same time I closed another trade with Swiss Franc, EUR-CHF. This one was presented here on Sunday. Franc proved a little too strong for Euro, and eventually pulled it down. I took 20 pips loss here. This trade could have been left open, long term prospects are bullish, but that would have meant changing original outlook for the trade, something I didn’t want to do. It was going nowhere, not behaving the way expected so what’s the point of sitting on it?
Yesterday yet another CHF cross was discussed here. This time NZD-CHF. That was a coincidence, as is today’s return of this pair. In the last post I focused on a long term chart of it, and I mean long term- weekly time frame. Last 24 hours painted a sell set up on hourly chart. This is not a beginning of a long term sell, at least not for me. As pointed out in last post, that will be defined by daily chart and target maybe as much as 500 pips.
Here my objective is about 55 pips for the breakout trade at 0.7260. or 35 pips for the pull back play. I hope this will come to intended conclusion within a day or two and is not too stress full. Speaking of stress… Forbes magazine has just released a list of most stressful cities to live in America. New York is ranked as second (one of the worst), because it is third in house affordability and ninth in air pollution. Shouldn’t those more polluted and less affordable cities rank worse than NY? I’m sure I overlooked some details, but it just doesn’t make much sense.
Mike K.
It sounds like you do a lot of straddle trading outside of what you cover in the blog. Can you share more on the subject?
We use variation of it as basis for systematic trading. Outside of that I apply straddles rarely, mostly as an opportunistic play.
Interesting. However, if you didn’t have a taarget, how do you know when to get out. This seems like a guess work, and so unlike you. All the other trades I’ve seen had more defined parameters. Thank you.
Gunnar, in these kind of set ups I expect the price to move in one direction about the duration of trading session 8 hours or so. These are general tendencies after congestions created by holidays.
Kiwi jumped on the news, it will be interesting to see how your trade turned out.
In the next post.
[...] meeting by Reserve Bank of New Zealand took place yesterday. Considering that I also had a trade in NZD-CHF form last post, I decided to stay up for a while and wait for the announcement. Not to trade it, but [...]
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You seem to have a lot of exotic pairs. Which MT4 broker do you use? I see you use Oanda besides that.
Most of the charts here are generated in my account with FX Pro, but I also use other brokers. Oanda, as you noticed, GFT. Nicest charts in my opinions are created by VT Trader, platform for CMS. Unfortunately, I have issues with broker so it is rarely used.
May I know whether it has been smooth sailing with FX Pro, Oanda and GFT as brokers? Or have you encountered problems before?
Leo, when you place a lot of orders, there will be some problems from time to time. Recently I had a trade not executed at all with FX Pro, GFT doesn’t allow scalping and is more suitable for larger accounts. All electronic platforms can have interruptions, like Oanda. But in principle all these brokers have been good resolving issues, not too much to complain.
[...] today suggest more action for Tuesday. I’m almost certain that markets will be more lively. On occasions like this I like to place straddles, looking for a breakout either way out of today’s extremes. Best candidates are typically [...]