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Strategies for Entering a Trade

Strategies for Entering a Trade

Richard Krivo, Trading Instructor

Power Course Instructor’s Response:Yes...the third touch is the one that validates.Based on the historical Daily chart on this GBPCHF pair, we would only want to take short positions as this pair is trending strongly to the downside.Based on the 1 hour chart you posted, there are three things that can be used to analyze the trade: 1) if the pair trades up to the black trendline, a short position can be taken as long as the candle does not close above the trendline; 2) put a Fib line (red line) as shown and from the Fib levels a trader can determine the potential level of retracement…once that level is hit, a short position can be taken; and, 3) if the pair closes below support (green line) a short position can be taken at that point.The idea here is that there is more than one way to analyze a chart depending on what is going on with the pair.

Strategies_for_Entering_a_Trade_body_20136d1225156378-post-day-chart-10-27-08.png, Strategies for Entering a Trade

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.