(4H) AUDCHF ripe for a short
AUDCHF seems ripe for a short on the 4H time frame. I make no recommendation on entry point.
Key points:
1. Established down trend on weekly chart.
2. Price struggling in a band or resistance on daily.
3. 4H time frame shows an early signal of a trend change (Aroons have made an ideal cross at 50 for the bears)
4. Stops can possibly be at 0.75500 which equates to approximately 100 pips loss on many spreadbetting platforms.
Cautious traders are free to make a tighter stop-loss of 50 pips or throw half a position-size at it. The more experience I gain in trend-following, the more I realise that too tight stops on higher time frames (due to the Average True Range), lead to early stopping out on what would have been good positions.
Note: For trend followers, risk has to be determined, specific to the time frame within which one is trading. Rewards are not usually targetable in trend following, as we can't tell where the trend will stop. R:R eventually realised can be 5 to 25 in the most successful trades - compared with maximum of about 4 - 8 for harmonic trend continuation trades. I expect 60-80% of all trend setups to fail.
Disclaimer: The information provided herein is opinion only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of investment. You are responsible for your own due diligence. To summarise, I do not provide investment advice, nor do I make any claims or promises that any information here will lead to a profit, loss, or any other result.
Key points:
1. Established down trend on weekly chart.
2. Price struggling in a band or resistance on daily.
3. 4H time frame shows an early signal of a trend change (Aroons have made an ideal cross at 50 for the bears)
4. Stops can possibly be at 0.75500 which equates to approximately 100 pips loss on many spreadbetting platforms.
Cautious traders are free to make a tighter stop-loss of 50 pips or throw half a position-size at it. The more experience I gain in trend-following, the more I realise that too tight stops on higher time frames (due to the Average True Range), lead to early stopping out on what would have been good positions.
Note: For trend followers, risk has to be determined, specific to the time frame within which one is trading. Rewards are not usually targetable in trend following, as we can't tell where the trend will stop. R:R eventually realised can be 5 to 25 in the most successful trades - compared with maximum of about 4 - 8 for harmonic trend continuation trades. I expect 60-80% of all trend setups to fail.
Disclaimer: The information provided herein is opinion only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of investment. You are responsible for your own due diligence. To summarise, I do not provide investment advice, nor do I make any claims or promises that any information here will lead to a profit, loss, or any other result.
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