[dc]O[/dc]ne of the longer-term trades I am watching is, what I believe to be, good upside potential in the USDCHF. Waverly Advisors caught a nice long a few months back and recently closed it out on weakness, but there is still considerable room to run on weekly/monthly timeframes. However, this daily chart shows a market where the next leg is more likely down than up: tight consolidation near the low of a recent swing is usually more indicative of the bears being in control. In a case like this, short-term traders are better off waiting for the resolution of the short-term cross currents before trying to trade with the longer-term setup. Longer-term ideas are excellent reinforcement and can lead to fantastic trades, but, if you’re going to be using reasonably tight stops, timing is everything–and that requires a keen awareness of shorter timeframes and patience to wait until the stars align perfectly.
- Post author:AdamHGrimes
- Post published:02/06/2012
- Post category:Pullback / Support / Resistance
- Post comments:1 Comment
Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.