Trade Canceled: 2011-08-11 7:45
I can’t believe I missed my entry again! This wasn’t the first time I spotted a really valid setup but wasn’t able to take the trade. Just as in my short AUD/JPY trade idea last week, I got the direction right but my entry orders were too conservative.
In this case, the .9800 level held as support and the pair bounced off the 38.2% Fib level. It didn’t dip to the .9700 area as I expected since risk aversion popped its head back in the markets again yesterday. And I thought the upbeat Chinese trade balance could push USD/CAD down to my entry… Apparently not!
I’ll be canceling my open orders now since the pair came close to making a new high and invalidating the Fibs I drew. In fact, it’s starting to look like a double top formation on the 1-hour time frame. But since I’m not ready to jump into a risk-taking mode yet, I’ll just take off my open orders instead.
Some of you pointed out that USD/CAD probably won’t dip as low as my desired entry and you were right! I probably should’ve just jumped in at market, huh? How else do you think I could’ve played this trade better?
C’mon, don’t be shy to share what you think! You can post your thoughts on the comment box below or holler at me through my Twitter account or Playing with Comdolls Facebook page. Drop by my Comdoll Corners too, if you wish!
See you around,
Trade Idea: 2011-08-10 7:45
Looking at USD/CAD’s 4-hour chart, we can see that the pair slipped down after it hit parity. Of course, it might have also helped that the FOMC statement was so bearish for the Greenback. With the Fed’s rates on hold until at least 2013, it’s no wonder that carry traders are flocking the high-yielding comdolls!
The pair is currently flirting within the .9800 area, which was previously a significant resistance. I’m hoping that the positive Chinese trade balance data early today and a bit of dollar-selling could push the pair a little lower to my .9700 entry target.
Why .9700 you say? Well, I took a closer look at my horizontal lines and I saw that the minor psychological level is lining up nicely with the 50% Fib. If the pair reaches my entry and goes back up, I plan on taking profits at parity. Meanwhile, I set my stop loss 80 pips away at .9620 in case the Loonie traders are interested in dragging the pair to .9700 and the 61.8% Fib levels.
I have to watch this trade closely though. Aside from an already oversold stochastic signal, Canada‘s trade balance report due tomorrow could still surprise to the upside. Right now my forex friends are expecting weak trade figures from Canada due to weak U.S. economy, but we never know, right? Heck, risk sentiment has been shifting so often lately that I’m getting dizzier than when I do my cartwheels!
Anyway, here’s the gist of what I’m planning to do:
Buy at .9700, stop at .9620 and take profits at parity. Watch the trade closely and move stops and entry if Canada’s trade balance report (or any other major news) rocks comdoll sentiment.