How I’m managing the risk of getting long at the USD/CAD floor

The 15-minute chart is in a mark down stage and the 34EMA Wave is pushing the pair lower along the 34 period EMA low.

10-12-2010 1-48-16 PM.jpg

This is actually a short-term intraday swing entry that is setting up what I call a “one-thing-leads-to-another”. If the pressure can continue towards the area between 1.0110 and 1.0995 this fifteen pip area will be a cushion from which buyers could rally the market since there is still a sideways range on the daily. The initial level I want to see supported is the psychological 1.0100 level since the bulls have allows very little bearish momentum to build below it when prices pierce this support.

10-12-2010 1-47-53 PM.jpg

Ideally as buyers step in to support today’s move lower, the 15-minute chart should begin it’s transition to a more sideways accumulation or distribution market stage.

While I will me mindful of any break below 1.0100 it is not the stop-loss nor Point of Validity for this entry long. I will watch the previous days’ lows between 1.0996 and 1.0993 and look for support at this level, my stop will be five pips below or for traders with more risk tolerance, use the 1.0075 low from October 7 minus five pips.

In oder for the USD/CAD to rally higher (I am looking for a move toward the session high a 1.0183) the U.S. Dollar will have to rally and the crude oil market will have to pullback below 82.00 and find bearish momentum.

  • fxstman

    I hope you don’t mind me asking, but what pattern indicator are you running on your charts?

    Thanks.

  • fxstman

    I hope you don’t mind me asking, but what pattern indicator are you running on your charts?

    Thanks.

  • http://www.ragheehorner.com Queen Cleopiptra

    I don’t mind at all. If there’s ever anything that you have a question about regarding the studies and overlays on my charts, please never hesitate to ask — so I’m glad you did.

    The indicator is an automated chart pattern indicator that I get from InterbankFX called the IBFX-PRS (Pattern Recognition Scanner). It’s free to clients and runs on MT4.

    http://www.ibfx.com/Tools/?id=Trading

    p.s. all my cards on the table: I’m the Chief Currency Analyst at IBFX.

  • http://www.ragheehorner.com Queen Cleopiptra

    I don’t mind at all. If there’s ever anything that you have a question about regarding the studies and overlays on my charts, please never hesitate to ask — so I’m glad you did.

    The indicator is an automated chart pattern indicator that I get from InterbankFX called the IBFX-PRS (Pattern Recognition Scanner). It’s free to clients and runs on MT4.

    http://www.ibfx.com/Tools/?id=Trading

    p.s. all my cards on the table: I’m the Chief Currency Analyst at IBFX.