Sadly, I ended 2012 with a losing trade but that won’t stop me from trying to start this year on an upbeat note. Here’s what I learned from my previous trade:
First off, I have to remind myself to allow for extra volatility during news releases. As you can see from the chart below, the pair did retrace to the area that I marked but it went a bit beyond my entry area at .9900. This was most likely because the U.S. dollar was feeling a bit jittery as the Fiscal Cliff deadline loomed, causing wider upward swings even if the Canadian retail sales figure beat expectations.
Next, I should’ve set my stop loss above the Fibs! After all, I was basing my trade on the 4-hour chart and a tight 30-pip stop wouldn’t have sufficed. Had I set a wider stop, I would’ve been able to stay in the trade until earlier this week and hit my profit target.
Lastly, since I really wasn’t planning on holding on to the trade and watching it over the holidays, I probably should’ve stayed out altogether. Too bad, it didn’t result in a win that I had hoped for! Still, I’m pretty content with my Q4 2012 performance as I managed to end in the green.
Got any tips for me this year? I really want to make larger profits this 2013!
Trade Idea: 2012-12-20 02:01
I can’t believe I’m posting my last trade idea for the year! Just when I thought that having a bad case of flu around the holidays season blows (pun intended), I suddenly realize that I have just been given an opportunity to end Q4 2012 in the green.
The first thing that caught my attention is USD/CAD‘s sweet setup on the 4-hour chart. Not only is the pair stalling at the previous week’s low area that we had marked in this week’s Comdoll Trading Kit, but it also formed a doji right on that level. And don’t even get me started on the potential retracement that I spotted!
Okay, I need to calm down a bit. So I’ll just tell you about the potential catalysts for the Loonie’s strength. I heard from my forex friends that Canada’s wholesale sales rebounded in October after suffering from the biggest drop in 20 months.
That’s gotta mean something for the retail sales scheduled in a couple of hours, right? If the retail sales data prints are better than forecasts just like it did in October when wholesale sales also surprised to the upside, then a Loonie rally just might have muscle behind it.
Here’s my initial plan:
Short USD/CAD at .9890 with a stop loss above .9900 and initial profit targets near last week’s lows (.9830).
As usual, I’ll be risking 0.50% of my account. Read up on our risk disclosure if you’re planning on jumping in with me!
Still, I’m planning to watch my trade as closely as I watch my soufflés. After all, the 4-hour chart is also showing a possible double bottom, which could also play out well if the retail sales numbers disappoint the investors.
I hope this trade idea is enough to keep me in the green this quarter! What do you think? Can you think of any tweaks that I can make? Any advice would be much appreciated!
Have fun and good luck trading this week, friends!
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