USD Swiss pair in 3min E-Signal Chart current uptill Fridays midnight European closing.
Firstly, it maybe a good idea to read my post of Mon March 22nd
I have been trading USD/CHF (successfully i should add) the last few days since the original UMLP short trade on Wednesday and now i can share with you perhaps the perfect setup which devloped on Friday and could be a setup for Sunday night Monday morning provided certain criteria are met.
First of all follow the link for this Video/Music by The Verve and play.....and at the same time open the charts below and follow my commentary below the charts.
Firstly, it maybe a good idea to read my post of Mon March 22nd
http://medianlinetrader.blogspot.com/2010/03/chf.html
But if you are impatient here are the basics in a bullet list:
But if you are impatient here are the basics in a bullet list:
1. (Since the recent high of 1.1246) Price is in a downtrend and down sloping ML set (RED) and has made a new SL (1.1014) taking out the 1.1040 level and consecutive lower S Highs. But remember the red ML set is within an upsloping green ML set so this is only a short term reversal but well overdue in my opinion and remember what has happened to the Euro and other USD based currency pairs recently so the US$ is overdue a correction even though i remain overall bullish.
2. The retracement is so far limited having been down to 40%( 1.1014)if we only count just the recent up move since March 3rd and price is now stuck between the Fibonacci .25% and 38.2% levels.
3.Using the last two swing lows (on a 10 min chart below) as P2 ...in both cases price has failed to reach the centre line.
4. Price naturally want to gravitate towards the red centre line (and the UMLP has been tested twice with excellent results) and with our consecutively lower highs we are due for a new swing low.
5. Using Hagopians law we can wait and see if price comes to the trigger line of either of these two forks. Price has already fallen though the blue LMLP and closed late Friday just a whisker below the black LMLP. I closed all my positions late Friday due to recent gapping moves on the Sunday Asian opening and there is always a chance (remember the EU ministerial meeting to discuss the Euro ahead of the markets opening) that price could gap up & shoot up to the black CL ....in which case all this is in vain...However, if we get to Monday European trading with price just around these levels and near the trigger lines then i would go short on a break of the lower(fat pink) trigger line.
6. If you go short on a break of the black LMLP ther is always a chance of a retest and the stop level may not give you a decent risk/reward ratio, so the trigger line approach is better and safer
7. What is my objective? Well a new swing low below 1.1014 is more than possible. The stop level
for a trade of the lower trigger line will be about 1.1270 ie, just over 10 pips and trade size will be two lots of 100k.
8. The actual trade entry will be timed using Ensigns B-line/Buffy template on a 3 and 5 and 10 min TF.
9. Check this out:http://www.trading-naked.com/andrews_trigger_line_setup.htm
10. In summary i hope i have shown a possible high probability trade setup ahead of time. Of course i may look a complete fool on Monday morning or worse...i might have a losing trade but i can tell you that my success with these types of trades is high and you could run an effective account if you just concentrated on finding price failures in ML sets in multiple time frames and different major currency pairs.
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