61.8% fib Tag

As you'll remember in my previous post of 2 Weeks ago I gave details of 5 currency pairs each demonstrating early stages of set-ups I tend to follow before entering a trade. As things stand I've not entered trades in any of them as yet. For one of them I missed the chance as the move began overnight therefore making the risk/reward ratio a little less favourable, one I forgot about, one didn't play out as expected, one still hasn't finished the set-up and one is very close to decision making time.

In all honesty there still isn't much out there that's worth trading based on my low-risk approach but as I've not posted any updates for a Week here's a quick one just to show I'm still plugging away in the background waiting for opportunities. Last Week I mentioned a few trade possibilities and 2 of those played out well even though I didn't take them myself. The 3rd one was AUD:CAD for a swing short from the same 50% fib level in this chart although I did suggest it may take a while to play out.

Although my concentration lies with swing trading, there are times when a great trading set-up makes day trading worthwhile so here's a quick synopsis of a trade I took earlier today. On the Daily timeframe my system has remained short on the FTSE 100 since May 2013, although the Hourly time frame has switched between short and long on a few occasions. However, today's trade was based on the simplest form of T.A but keeping in mind that I find FTSE a quirky index that has its own characteristics. 

GBP:CAD is currently trading in the middle of its long term trading range but has shown some potential for a possible move from here to the top of its trading range which may provide a short term swing long set-up. The 4 Hourly chart shows the recent leg down to have found support at the 61.8% fib retrace from the last major swing low to the recent swing high. For a potential long entry this would likely become the area where stop loss positioning should be considered.

Still no new swing trades unfortunately. In fact, at times I've felt like a rabbit in the headlights over the last couple of Weeks while watching huge swings take place across a number of FX pairs, sometimes responding to support and resistance, but other times completely ignoring them. It can be tough when markets go from dull uninteresting trading patterns to full on wild volatility because neither  are ideal situations for entering new swing trades, rather, they are more suited to a day trading environment.

Sometimes the Markets get the better of me and no matter how much I analyse the situation there just doesn't seem to be an answer that can prevent the same occurrence in the future. Such an occurrence arose today with the NZD:CHF swing long. This is the 2nd swing long in succession on this pair having taken profits first time round only to see another desirable set-up soon after. Having held this 2nd swing for almost 2 Weeks with absolutely no progress, last night I decided it was time for a closer look. The result of this was to effectively forfeit any further risk by setting the stop loss at break even.