Why I’m focusing on long-term trades
Dave Floyd is a professional FX and stock trader based in Bend, OR and the
President of Aspen Trading Group. Dave’s approach to FX combines technical
and fundamental analysis that results in trades that fall into the swing
trading time frame of several hours to several days. For a free trial to
Dave Floyd’s Daily Forex Alerts
First, some follow up from last week’s article.
The text and chart below is from last
Wednesday’s column. This trade has played out well, and for those who may
have taken it, we still suggest closing the trade at the 1.5660 level and
tightening the stop-loss to 1.5640.
We are keen to go long EUR/CHF – we did not buy the break of the bear
trend-channel (see chart below) but are willing to buy pull-backs towards the
1.5600 level.
Look for a price target of 1.5660 or perhaps higher.
FYI: I have received a few emails asking why
there have been so few 24-Hour Target Trades in the last few weeks. The answer
is simply market conditions – we have not had much luck with short-term trades
(duration of less than 24-hours) in dollar-based pairs so far this year. Choppy
trading conditions have allowed for the stop-losses to be easily hit.
Since early 2006 (2nd week maybe?) we have focused more on longer-term trades,
several days in duration, and relied more heavily on the FX crosses, especially
the NZD crosses. This has served us well.
The chart below highlights the types of trades we have focusing on for 2006. Not
only has it provided good trading ideas to our research clients but to our
managed fund program as well.
We are also watching the JPY crosses for short
set-ups as it appears that the yen is on the verge of breaking this persistent
weakness that has plagued it for several months now. Crosses like NZD/JPY and
AUD/JPY seem like ideal crosses to short on pullbacks.
As always, feel free to send me your comments and questions.
Dave