Pick of the Day: USD/CAD – Trade Closed

Trade Closed: 2007-02-20 17:05

Our trade stopped out today as the loonie sold off against all of the majors today. Our short orders were triggered at 1.1675 and 1.1690, and unfortunately, USD/CAD didn’t find resistance until 1.1715. So, we were stopped out on our full trade for a total loss of 45 pips.

1st half: -25 pips
2nd half: -20 pips
Total: -45 pips

Trade Update: 2007-02-20 11:15

We entered half our normal position size as we saw volatility push USD/CAD lower and then higher after inline CPI numbers and slightly better than expected Leading indicator numbers out of Canada. I still think there is a bearish sentiment on this pair, but with such strong upside momentum I am going to adjust my profit target on this position to 1.1655 to take a quick profit. Stay tuned!

Trade Update: 2007-02-20 00:15

PCPOD.ff.png

This evening we will take a look at USD/CAD. We’ve seen weak data out of the US lately, including Philly Fed Index, jobless claims, housing data, etc. All of this, along with weak US PPI forecasting a weaker CPI number, has the market bearish on the Greenback. On the other side of the pair, we’ve seen stronger data out of Canada, including more jobs, a larger trade surplus, and a surprise in Wholesale Sales. This has got me bearish on USD/CAD, and we’ll see if we can jump in short at a great price!

On the chart, we can see that the pair has been range bound for a bit now, and stochastics are on the rise. With Canadian CPI and leading indicators out later today, we may see enough volatility for the pair to break out of the range. With a bearish sentiment, I’d like to see a quick break to the upside, so that we can jump into the pair short at a great price.

Short half normal position USD/CAD at 1.1675, stop at 1.1700, pt at 1.1635

Short half normal position USD/CAD at 1.1690, stop at 1.1710, pt at 1.1655

Remember to never risk more than 1% of your account on any single trade, so please adjust your position sizes accordingly.

Good luck and good trading!

  • shadie

    why you want to risk 20-25 pips for the profit of 35-40 pips?
    if you look at the weekly chart you’ll see that there is a good potential for shorting this pair in the long run.
    if this pair won’t make a higher high its going down.. for a big profit.

  • shadie

    why you want to risk 20-25 pips for the profit of 35-40 pips?
    if you look at the weekly chart you’ll see that there is a good potential for shorting this pair in the long run.
    if this pair won’t make a higher high its going down.. for a big profit.

  • pipcrawler

    greetings shadie,

    trading is situational. while i do try to maintain a favorable risk to reward scenario on everytrade, i also have to keep in mind market conditions, upcoming events, major and minor technical levels, and probabilities. Now, this is the “Pick of the Day.” Unfortunately, on smaller time frames, like intraday trading, probability of profitability often weighs out risk-to-reward in this type of market. On this type of trade for instance, the market was ranging, which means we may see a break out soon. Fundamentals were telling me the market is bearish on this pair. And based on technicals, i found i should’ve seen resistance between 1.1670 – 1.1710. So, I based my entries and exits on that. Unfortunately, the loonie sold off against all the majors and we were stopped out for a total of -45 pips. Also, if you take a look at the original trade idea, if you scaled in at the different levels, then the max risk would have been a total of 45 pips, while the max gain would have been 75 pips. a 1.6 to 1 reward to risk ratio. I hope this makes sense shadie

  • clam0391

    The more I see of fundamental considerations, the more I become interested in technical considerations – in the short and medium term anyway. I will stay away from influential news moments, which tell us what NOT to do, then trade purely technical unless I am looking for long term, position trading – and that seems to be where the big money is made.
    Unfortunately, I am temperamentally unsuited for long term stuff, don’t have the patience or the sticking power!

  • pipcrawler

    greetings shadie,

    trading is situational. while i do try to maintain a favorable risk to reward scenario on everytrade, i also have to keep in mind market conditions, upcoming events, major and minor technical levels, and probabilities. Now, this is the “Pick of the Day.” Unfortunately, on smaller time frames, like intraday trading, probability of profitability often weighs out risk-to-reward in this type of market. On this type of trade for instance, the market was ranging, which means we may see a break out soon. Fundamentals were telling me the market is bearish on this pair. And based on technicals, i found i should’ve seen resistance between 1.1670 – 1.1710. So, I based my entries and exits on that. Unfortunately, the loonie sold off against all the majors and we were stopped out for a total of -45 pips. Also, if you take a look at the original trade idea, if you scaled in at the different levels, then the max risk would have been a total of 45 pips, while the max gain would have been 75 pips. a 1.6 to 1 reward to risk ratio. I hope this makes sense shadie

  • clam0391

    The more I see of fundamental considerations, the more I become interested in technical considerations – in the short and medium term anyway. I will stay away from influential news moments, which tell us what NOT to do, then trade purely technical unless I am looking for long term, position trading – and that seems to be where the big money is made.
    Unfortunately, I am temperamentally unsuited for long term stuff, don’t have the patience or the sticking power!