Hi, and welcome to today’s Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to go over NZD/CHF. We took a trade on this a few days ago or at the end of last week. I wanted to cover what was going on in this market and why I’m looking for further downside.
We’ve been very heavy on Kiwi weakness this week, and that’s what we should be focusing on, and that’s not going to change for me because that’s where I feel it’s the best place for our trading opportunities at the moment. It’s the whole reason why I use currency strength and weakness: to narrow down on a currency and then try and find the best currencies to trade it. So, I know I want to be short on Kiwi. It’s which currencies am I going to do that with. So, we’re already short on NZD/CHF, which is fantastic.
We’ve looked at other opportunities on EUR/NZD. For instance, NZD/USD and things like that. But NZD/CHF is the only one that’s taken off for us. So NZD/CHF is moving nicely to the downside. Will there be some adding positions? That’s what I’m going to be looking for today.
So, this is our current position. I’ve mapped it out here on TradingView to make it a little bit easier for us. The next step for me is to get those daily close nicely, heading towards our targets. What I want to know now is could I add any positions? And what I like to do is check out that four-hour trend. To me, the four-hour trend is a really important trend to watch because it is a nice mid-term trend. It’s really easy to follow, and it’s always got good support and resistance levels that tend to hold quite often. I enjoy trading or analysing this timeframe, especially with the trend because I know that my trading strategies are better in trending environments. That’s my job; my job is to find a trend. The strategy and everything else does the rest for me. I don’t have to think about the strategy anymore. It’s focused on where the trend is, and then the strategy should perform.
We’re looking at this position, here. I could have added a position here because the market had broken through and formed a new lower low. That’s a start that the trend could be forming. It’s pulled back into this area of resistance, and I guarantee there will be a 15-minute change in the cycle, here, which is how I would look to enter the markets. Now the price is pushing to the downside. We’ve got this nice little shelf, around 0.61, which I quite like the look of as well. Now, the market has broken down. What I’m going to do next is to draw a rectangle on and say to myself: “it could even span up here.” It doesn’t matter. All I want to see is for the market to retest that zone. If the market can rally up into that point, here, I’ll be looking on the 15-minute timeframe to see any changes in cycles. Is there a double-top pattern? Is there a head and shoulders pattern? Is there anything to suggest that the 15-minute is going to start lining up with the four-hour timeframe? If there is, then I’m going to be looking for that short.
Let’s show you what happened when the price came up into these lows, up here. If we go into the 15-minute timeframe, what happened at this point? Did the market change cycle? What I look for is changes in trend. You can see, here, we have the market forming a double top pattern. It doesn’t breakthrough lows at that point. The only time it does is here, which may be a little bit too late to enter the trade at that point. But, if you did enter a trade and put your stop loss nice ten pips or ATR above this stop loss, I like to do or look at the size of the spread. If the spread is good enough, you can look to add spreads on top, but I like to add a few more pips. You can see on 20 that I like to add ten onto my stop loss because you want to account for that spread. You want to account for any swings in the market, and I’ll target a two-to-one risk-reward ratio. In this case, it’s a 60 pip target, which comes in nicely, down here.
The point is you’ve got the things lining up: you’ve got the daily closes finishing bearish, you’ve got the four-hour timeframe trending to the downside, it pulls back, then the 15-minute changes cycle with that candle sticking, there, and then the market falls to the downside.
You could wait for that break in here as well, which would be the most ideal, but the markets aren’t perfect. They’re not going to do what you want it to do immediately. Half of the time, it will try and push highs again before going down. That’s why I like to have a little bit of buffer above the highs, and the markets to come to the downside. I’ll be looking for the same thing here. If the market starts moving back in the four-hour timeframe, the four-hour starts creating some bullish candlesticks. I’m looking for price to come back in into this level, then I’m going to dive to our 15-minute timeframe, and then look for that change in the cycle to agree with our position and trade short again. So, that’s how I like to look at the market. I like the 15-minute timeframe to agree with my four-hour timeframe and my daily timeframe.
Now that the four-hour is creating these nice lower lows, through there. I want to be looking to continue to sell the market in line with that trend.
If this suddenly rallies and maybe takes this high out, and closes above that, then everything has changed. The four-hour trend is not intact anymore. So, I have to leave this one alone. As long as the four-hour trend remains intact, I’m happy to continue looking for those positions.
Thanks for watching this video update. I hope you enjoyed it. Keep an eye on trends. Trends are where you make money. Thanks for watching. See you in the next video.
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