Thursday, July 23, 2020

US Dollar Getting Hammered vs. the Swiss Franc


The US Dollar Index has been in free fall throughout the month of July.

The US Dollar Index, which had once hovered around $100 is down to $94.

Part of this is due to the perception that the strength of the US economy is weakening, in light of the Coronavirus outbreak in the US.

Technically, a "Death Cross" set up, where the 50 SMA, crossed the 200SMA to the downside, as illustrated in the chart below.


With this information in mind, let's take a look at the US Dollar vs. the Swiss Franc.

Click on Charts to Enlarge

Same deal. The dollar is getting hammered against the Swiss Franc. Price is traveling well below the 200 SMA, 50 SMA and the T-Line (8EMA). From now through the end of the week (tomorrow), this trend is showing no signs of reversal.

A Low-Risk Way to Trade the USD/CHF is with Nadex Binary Options

With Nadex Binary Options, you are you expressing your opinion about where a market will travel relative to a fixed price level (strike price), and also within a specified time frame.

Nadex Binary Options are traded in Contracts. Each contract is valued at $100. The marketplace of buyers and sellers determines what your risk and reward will be.

Example: Let's say the underlying market is at the same level of a strike price. You might be able to buy a contract for $50. That means someone on the other side of the trade is also willing to risk $50.

When your trade fills, $50 will be deducted and withheld from your trading account. If you hold that trade until expiration, then there are 2 possible outcomes:
  1. You are right, and will collect $100, per contract traded, or
  2. You are wrong, and your payout will be $0, so you forfeit the $50 that was withheld.
You are not married to the trade. You can exit any time you wish. You can exit to lock in profits or to minimize losses if the trade is moving against you.

In this case, I was trading my opinion that the USD/CHF would close below 0.9260 by 3:00 PM ET at the end of the day.


The order filled at around 11:15am. Here are the details:

Contract Details:

Contract: SELL  USD/CHF >.9260
Contract Expiry: Daily: Expires on Thursday, July 23 at 3PM ET.
Price: $50
Maximum Risk: $50 (plus exchange fees)
Maximum Reward: $50 (less exchange fees)

Trade Results

At this point, I have two options:
  1. Take Profit - This trade is already up $35.00 in profit out of the maximum $50 profit per contract. That's not too bad. I could lock in a sure profit and call it a day.
  2. Let it Ride - With 1 Hour and 47 minutes left until expiry, you could decide that the likelihood is slim that the market will reverse and take you out of the trade for a total loss. All it has to do is close anywhere below 0.9260 for you to receive the maximum profit of $50 per contract.
In today's trade, I'm going for Option #2. I'm going to bet that the downtrend continues.

UPDATE: Thursday at 3:00 PM ET. This Contract expired below .9260 yielding the maximum profit of $50 per contract traded.

Try Nadex Today, Risk-Free

What I like about Nadex the most is that every trade has capped risk that is known in advance before you place your trade. That's huge in these days of extreme market volatility. It's impossible for a trade to run away from you. No margin calls.

If you're curious about trading with Nadex, download their free demo here. Your account will be funded with $10,000 in play money and you can practice trading with defined risk.

You can fund a Nadex account for as little as $250. Nadex is available for traders in 41 countries.