Pick of the Day: USD/CAD – Trade Closed

Trade Closed: 2007-04-11 08:40

The second half of our open short position reached the adjusted profit target at 1.1460 during the late morning Euro session. This offsets the small hit we took with the first half position and we came out with a small gain of +10 pips.

1st half: -10 pips
2nd half: +20 pips
Total: +10 pips

Trade Update: 2007-04-10 23:40

No pick for tonight ahead of the FOMC Minutes tomorrow to avoid event risk. We will continue to watch our open position on USD/CAD in which the current ask at 1.1475. I still feel there is a short bias on the pair with the positive fundamentals out of Canada and with the potential for oil prices to rise with the current limits on oil refinery capacity. We will leave our exit orders as is. Please stay tuned for updates on this trade. Good luck!

Trade Update: 2007-04-10 12:16

The markets have been trading in a tight range today and our position in USD/CAD has been see sawing back and fort between 1.1480 and 1.1460. We will adjust our profit target to 1.1460 (bottom of todays range) and reduce our risk by adjusting our stop loss from 1.1520 to 1.1510. Stay tuned for updates.

Trade Update: 2007-04-10 08:20

The pair seems to have gone with my short bias as we were triggered during the Euro session to short at 1.1510 to open up half of our position. Unfortuantely the stop was too close at 1.1520 and was whipsawed out for -10 pips. For those of you who re-entered you should’ve caught a nice 40 pip move down. The second half of our position was triggered at 1.1480 and met resistance at 1.1470. I feel confident that the support broken at 1.1485 has turned into resistance, so we will hold but please adjust your profit target on this open position to 1.1450. Stay tuned!

Trade Idea: 2007-04-09 23:00
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Greetings my friends! Let’s kick the tires, light the fires, and do some Forex trading! Huh? Sorry, just a little excited because it seems like it was a long weekend, didn’t it? Well, we’ll get this week started by taking a look at USD/CAD.

A few moments ago, we saw a broad dollar sell off on speculation that China may retaliate after reports the the US government plans to file complaints to the WTO on copyright piracy. This may play onto my idea that we will continue to see USD/CAD sell off as the US economy worsens and that traders may continue to place bets on oil as demand may rise during the next few months. So I see a short bias on the pair, and look for a short play if the pair drops below the previous lows. Here’s a trade idea:

Short half position USD/CAD at 1.1480, stop at 1.1520, pt at 1.1425

Short half position USD/CAD at 1.1510, stop at 1.1520, pt at 1.1465

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

This trade may take longer than a day to reach profitability, so stay tuned for updates. Good luck and good trading!

  • vmertes

    I still cannot understand what this means – is it advising as to what our stop on the trade should be, when we should buy in, and what we should place our limit at? It is all still so very confusing to me.

    Short half position USD/CAD at 1.1480, stop at 1.1520, pt at 1.1425

    Short half position USD/CAD at 1.1510, stop at 1.1520, pt at 1.1465

  • pipcrawler

    Hello vmertes,

    What we are doing here is a trading technique called “scaling in.” Basically, we have a sell bias on USD/CAD, but unsure of when it will turn south. To reduce the risk of uncertainty, we go in short at different price levels with only a portion of the total position we want to put on.

    At the time i posted this trade idea, USD/CAD was trading at 1.1500, a psychological significant level. I don’t know if prices will find support there or break. So, I entered an order to short half of my normal position size at 1.1510. This gave me a good short price. And I shorted again at 1.1480, which means I added more just in case we saw momentum in favor of our trade.

    But I hope you see the point of scaling in now. Based on the situation at hand, sometimes we don’t go “all in” to reduce our risk and give us peace of mind.

  • vmertes

    I still cannot understand what this means – is it advising as to what our stop on the trade should be, when we should buy in, and what we should place our limit at? It is all still so very confusing to me.

    Short half position USD/CAD at 1.1480, stop at 1.1520, pt at 1.1425

    Short half position USD/CAD at 1.1510, stop at 1.1520, pt at 1.1465

  • pipcrawler

    Hello vmertes,

    What we are doing here is a trading technique called “scaling in.” Basically, we have a sell bias on USD/CAD, but unsure of when it will turn south. To reduce the risk of uncertainty, we go in short at different price levels with only a portion of the total position we want to put on.

    At the time i posted this trade idea, USD/CAD was trading at 1.1500, a psychological significant level. I don’t know if prices will find support there or break. So, I entered an order to short half of my normal position size at 1.1510. This gave me a good short price. And I shorted again at 1.1480, which means I added more just in case we saw momentum in favor of our trade.

    But I hope you see the point of scaling in now. Based on the situation at hand, sometimes we don’t go “all in” to reduce our risk and give us peace of mind.

  • mike1349

    Hi,I am long us/can.I was wondering do you have any idea how much these pairs go down?Am I suppose to get rid of them with $10000 loss or keep them?

  • pipcrawler

    Hello Mike1349, fundamentals are fueling the downside momentum of this pair. Using a Fib extension tool, I think the pair may reach as low as 1.1415 for the day. This market will range until the FOMC Meeting Minutes release at 2:00 pm EST. This could be very volatile for USD, so I would keep that in mind in your decision to keep your position open or close it. Good luck!

  • mike1349

    Hi,I am long us/can.I was wondering do you have any idea how much these pairs go down?Am I suppose to get rid of them with $10000 loss or keep them?

  • pipcrawler

    Hello Mike1349, fundamentals are fueling the downside momentum of this pair. Using a Fib extension tool, I think the pair may reach as low as 1.1415 for the day. This market will range until the FOMC Meeting Minutes release at 2:00 pm EST. This could be very volatile for USD, so I would keep that in mind in your decision to keep your position open or close it. Good luck!