The USDCHF on the D1 timeframe confirmed that an uptrend was underway on 1 February when the price shot past a previous top, after a higher bottom. Since the definition of an uptrend is continuously higher top and bottoms, this was the first objective confirmation of a new uptrend in its early stage. A similar trade setup was discussed on 1 February 2021.Since then, the uptrend has continued to make higher tops and bottoms reaching the second take profit target on 26 February.
This illustrates two critical aspects of trading. Firstly, this is an objective way to see what the market is currently doing - The market structure chart will either indicate an uptrend, downtrend or ranging market. In this instance, the first higher bottom was recorded on 22 January and then a higher top formed on 5 February. This was followed by a higher bottom on 16 February and then another higher top on 26 February.
Secondly, the importance of patience after a trade has been triggered. It allows the market structure to run its course and the principle of “letting your returns run” to play out - making it easier to make a net profit over a series of trades.
If the market price should change structure with a lower top followed by the price going below the previous bottom, the uptrend or consecutively higher top and bottoms structure is no more and whatever the market has given must be taken and the trade closed.
However, if traders in the USDCHF market maintain a bullish sentiment and demand overwhelms supply, the outlook for the currency pair on the Daily timeframe will remain bullish and the trade can thus be allowed to remain open and possibly reach the third and last take profit target at 0.9084.
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