Hi guys, I've got an open position GBP/CHF. Now my problem is that in the last few weeks price has dropped and the COT with it last week. Now I wanna know what you guys do in a situation like this. Close your position instantly, wait for the next COT data or put a tighter stoploss? at the moment I am in the red btw Entry: 1,2476 SL: 1,2098 based on 12 month ATR. So at this moment I am in 1% loss of forex exposure. Possibly 2% if stoploss is hit.
would love to know your opinions and what you guys did if you are in this trade.
Here are a few things to consider to help you make the decision:
Have the underlying fundamentals changed?
From the MCSM scores it looks like GBPCHF short isn't fundamentally correct right now:
Based on this, I would recommend you scale out of your position, and find a new idea to replace it.
Do you have a better idea to replace GBPCHF with?
How I currently view COTA .
Notice how the net hedge fund positioning (NHFOI) is long on GBPCHF, but there has been a massive reduction in long positions on sterling the weeks prior, and a large number of shorts being closed on CHF. In my opinion, this still provides sentiment for a slight short bias, but as the fundamentals are not in harmony, then this trade idea has a low probability.
Final Thoughts