I've switched back to using the daily chart as noted earlier today to save myself some hassle. This is the first entry using the daily chart since the switch. But I actually placed this order before going to bed and then it was executed last night while I was sleeping. USD is taking a beating these days and USD/CHF is testing a double bottom. I entered this trade based on Figure 1 for the following 4 reasons:
- RSI is shaping up a positive divergence if we can hold this support.
- RSI is as oversold as December 2008.
- Entry price of 1.027 is at a previous congestion zone based on Figure 2.
- USD/CHF took a very fast dive in the past 3 days, which usually prelude a retracement up.
However, the trend remains obviously downward. That's why I'm entering with only a 50% as there's no confirmation just yet. Once there's confirmation, such as the RSI making a U bottom, I plan to add the other 50% position. Entry: 1.02747, previous congestion zone, see Fig. 2 Stop: 1.0236 Target: 1.045 Reward / Risk = 175.3 / 38.7 = 4.5 > 3