The current time is 7:49 pm GMT on 06/28/2010, I just opened a trade on the USD/CHF. Looking at the current market snapshot, there’s an opportunity on the 1-hour & 30-min USD/CHF charts:
Here are the details:currency pair: USD/CHF
timeframe: 1-hour
Most Recent 1-hour wave: I – 1.0939
II – 1.0814
III – 1.0896
Entry: 1.0870 short
Stop: 1.0939
Limit: 1.0771
Max Profit: 125 pips
Max Risk: 43 pips
Reward/Risk: 290.7%
Entry Chart USD/CHF 1-hour
This is the chartshot that I used to enter this trade:
As you can see, this trade signals the beginning of a third wave in a 3-wave pattern. Since we’ve reached point V by hitting the 61.8% level, this is a strong signal to go short.Fibonacci Calculator
When I put the numbers in the calculator, I forgot it was a 3rd wave of a 3 wave pattern. Since the 2nd wave was shorter, it doesn’t matter since we use the shorter wave for a 3rd wave. Since I only used the single wave calculator, the same result is obtained. In my screen shot below, you’ll see that I used the most recent wave in the single wave calculator. This was a slight mistake, but it turned out not to matter…
Placing order at eToro
Step #1 is to hit “sell” on your currency pair (see image below). When you hit this button, you haven’t entered the trade yet. You will enter it when you complete step #2. 
Step #2 is to adjust your leverage to 400:1 & your risk to $25 & hit “open trade” (see image below): 
Step #3 is to adjust your stop & limit prices from your “open trade” screen. You can do this by clicking on the dropdown arrows from your open trade screen. 
Now the trade is live! I’ll update this trade when something changes. For now, there is a stop & limit so there is a clear exit strategy.Trade Adjusted – Moved Stop
When the price moved below 1.0814 (IV on the picture below), this was a signal to move the stop to V. Since there is already a profit in the trade with a nice downtrend on 15-min, 30-min, 1-hr, & 4-hr charts, I’ve moved the stop up even further to 1.0840 to lock in a guaranteed profit of at least 30 pips.
Not only can this trade no longer lose money, the worst that can happen is that I walk away with a 30 pip profit.How Did I come up with 1.0840 as my stop?
Look at this picture below:
In the picture above, notice the 3 dotted lines. These are the fibonacci lines for the recent downtrending wave. Notice how currenct prices have moved into a consolidation below the 61.8% level (38.2% retracement). Since the most recent wave hasn’t hit that level yet, I wanted to choose a stop that allows it. 1.0840 is a former support for two attempts at downward movement, so it’s a good resistance line to try to ride this trade further down. This allows downside potential for a breakout down on the recent consolidated range & locks in profits in the event of an upside channel breakout.Stopped Out for 30 Pip Profit
On 6/30/2010 at 6:33 am GMT the trade hit the stop for a 30 pip profit when the price hit 1.0840. Had I kept the original stop, the trade would have hit it’s original profit limit of 1.0771 for a 125 pip profit. Some of the live bootcamp members didn’t adjust their trade and captured nearly 100 pips on this trade.Final Thoughts
I was a little aggressive with a tighter stop on this trade. Since the 4-hour chart had a really strong downtrend it would have been fairly safe to keep the original stop until the price reached the newer low (falling below point IV), at that point I could have raised my stop to breakeven (entry price) and would have still made 125 pips. The price of locking in 30 pips profit was that it cost me 95 extra pips to play it safe. I’m never upset about taking profits, so this was definitely a good trade. I made 47.95% profit on this trade on the money I risked, which is superior to any type of savings account or mutual fund in terms of ROI. If you’d like to see these trades live, as they develop – there’s still time to register for the LIVE 90 day forex trading bootcamp, so you don’t miss any more opportunities.
rapidforex.com (Brian Campbell)
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