USDCHF Long Entry

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    Welcome to the inside of my trading brain. I built this forum so that I could jot down my thoughts as I take trades, as well as being able to add follow-ups for further analysis.

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pdr

Still have my trading 'L' Plates
Staff member
#1
Another one for the confluence required handbook. This folks, is yet another textbook example of why you should look for sound confluence in your trades, rather than just using one or two reasons for entry. Yet again this is about the dominant trend as opposed to a trend reversal.

First the original chart at time of entry (below). You can see my thoughts illustrated by the blue lines. Price was looking to rally, so I figured a bounce, pullback then off to targets. Boy, was I wrong.

USDCHF_2018-01-11_18-33-12.png

Now onto some further analysis.

Looking at the chart below, I have illustrated my thoughts at the time of placing the trade in a more visual manner. This helps me to understand where I went wrong (and every now and again where I went right).

USDCHF_Forum_1.png

As mentioned, the blue lines indicated my price thoughts. You can see the candle that I was using to gauge my entry and the entry long was on a break of the high of that candle +5 pips.

All looked good, but what I failed to pay attention to again was RSI. And RSI as mentioned previously (and will be mentioned many, many more times over the coming weeks and months) is my roadmap of choice.

Let's take a look at the same chart, but with one extra comment in the RSI section at the bottom (the blue squiggly line).

USDCHF_Forum_2.png

Now let's look at how the trade actually played out.

USDCHF_Forum_3.png

You can see what I mean about RSI being a roadmap to price. I'm going into this week with a renewed sense of wonder at just how powerful RSI is. I'm hoping this will help me get on the right side of the ledger in January 2018.