Since USD looked like a really solid outlook, I was prepared to trade it against 2 other currencies. CHF, in it’s basket, had broken some support levels and was on a bit of a rally. It looked like it still had weakness behind it, so I looked at it vs USD as well.
When I got to this chart, price was pushing up and was just breaking out of a strong high base. Looked like a great pattern to me, so I set entry orders.
Entry – 0.89662
Exit – 0.89625
I was in this trade, and near the end of the day I looked at equity futures and they looked pretty strong. Thinking about the correlation between equities and USD, I was nervous that price would push down strong on good news in the market, so I adjusted my stop. I moved it so that if price reversed, I would only lose half of what I originally planned — which was near a pretty strong resistance area, so I didn’t mind that at all. Overnight, price pushed down and triggered my stop loss for a small loss.
One thing I failed to consider, though, is the fact that CHF is also a risk-off currency, and hypothetically with an increase in equities this would also continue to drop, making this trade still valid. Looking at how things have transpired (now, on 2/5), I can see that had I left my stop alone and followed my rules, this would’ve been a monster trade. Oh well, live and learn. I still don’t hate the move I made, I just maybe wish I had picked a better pair (maybe something vs AUD or NZD) to do it.
