joebrownFX

LET THE MARKET SHOW YOU WHERE TO GO

OANDA:NZDCHF   NZD/CHF
Notice the 5 touches of previous resistance marked by the blue arrows. This "strong level" entices people to sell and place their stops just above the level. See how price begins to fall from this level marked at the red arrow? This also draws more sellers into the market; people don't want to miss out; then BOOM! Price breaks the level and wipes out everyone who shorted earlier. The banks know people place stops here. It is great liquidity for them to take then drive price further down. Think of it like this, if you could enter above the level with a sell order you are already getting a better entry price. Currently CHF and JPY are strong as they are safe haven currencies, so it is a good time to short commodity currencies against them. I'm in this trade. Results to follow.
Trade closed: stop reached: -1% Missed out on about 2%. Room for improvement - I could have moved stop to BE at least at the far left of the trade projection box, just above the little structure.