USD CHF Revisit’s Original Box Trade Short Set Up for W/C 10th October 2011

USD CHF Revisit’s Original Box Trade Short Set Up for W/C 10th October 2011

The idea behind the trade-able technical set-ups worthy of posting on the blog is literally to publish the best of the best ensuring that every trade taken has the highest probability of delivering good solid results with little in the way of risk. I think the set-ups detailed since blog inception demonstrate this very well having had only 1 losing trade in almost 3 Months worth of analysis. Arguably that losing trade was only through poor stop loss placement because I re-entered that position (AUD:NZD) and it’s now performing as originally intended.

Unfortunately a time comes where there just isn’t much that can really be considered high probability and a choice has to be made whether to leave these pages blank until one comes a long, or, to look at 1 or 2 future possibilities from the watchlist.

The one I’m going to talk about here has a history for me and it’s my original interest in the pair that has allowed me to spot the trade-able set-up that could be in the making right now.

Looking back to my first trade on this pair, it was a set-up that I just couldn’t put into words, and it’s this trade that coined the term “Box Trade” simply because price had traded a range (inside a box), fallen out of that range (the box), and then retraced to re-visit the breakdown point, which is also the point where the trade was initiated.

Putting it into a picture, this is that original short entry shown on the 4 hourly time frame:

And the follow up 4 hourly chart a few days later:


And the daily chart a few Months later, showing the original short entry:


Hopefully that puts you in the picture!

So, where are we now?

Well, after a massive recovery following SNB intervention causing a collapse in the Swiss Franc, USD:CHF is revisiting that precise level where the original box trade short entry was taken.

Whether this is a trade-able short entry or not is a tough call, but in trading if something works once, the odds are that it should work again. There are some additional levels to keep an eye on, most notably the 50% Fibonacci level that resides just inside the original box, and if I’m to take a short entry on this I’d probably want to see that Fib level tagged first, complete with some MACD divergence and rolling-over indicators.

This current chart explains:

If I take an entry on this, I’ll post details of it in the comments beneath this post.

  • RS2OOO
    Posted at 18:24h, 10 October

    Huge bearish engulfing today. Happened so quick I didn’t get a chance to get positioned so still watching and waiting for now.

  • Pingback:This Weeks Swing Trading and Day Trading Round Up.
    Posted at 22:01h, 14 October

    […] similar with the USD:CHF short which pretty much started collapsing from the moment market’s opened last Sunday night […]