Here’s a quick entry adjustment to my short EUR/CAD idea from last week.
EUR/CAD Fib Short
Last week, I put up an idea to short EUR/CAD at the Fibonacci retracement area to play my fundamental bias in favor of the Loonie of the euro. To read more about the fundamental argument, you can check out the original EUR/CAD short idea here. If the market did trigger my orders at 1.4570 by the end of the week, then I would close the orders ahead of the weekend.
Well, that’s what I did and the market did reach that area, which quickly met sellers as seen on the four hour chart above of EUR/CAD. And with the stochastic indicator giving us a bearish divergence signal, I think the odds of success are pretty good, so I’m going to hop in this trade at market.
But with a long Loonie position working with my GBP/CAD short play, I’m going to adjust this trade into a smaller, shorter-term play to limit my Loonie exposure. Here’s my new plan:
Short half position at market (1.4540), max stop at 1.4620, max target at 1.4455
Again, I’m only risking 0.50% of my account on this trade and I’ve got max potential return-on-risk of around 1.07:1. The potential R:R is smaller than I usually go for, but this is meant to be a shorter-term trade so it’s okay for me.
What do you guys think? Let me know in the comments section below!
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