My USDCAD trade is up 150 pips as I write this at 8:25AM EST. (I actually have two trades on, one at 1.0333 and 1.0336.) I've been here before.
If you look back in this blog, you see I’ve been trading this pair since October 15. At first it looked as though I was just buying low and hoping for the best. Not me. I don’t take hope trades. I buy because of evidence and then I wait to see what happens. Last week I took some profits at 200 pips. It then rose close to 300 pips and fell heavily, stopping out my remaining position at 100 pips on Thursday. At that point I went long again with two trades and explained why in the blog that day.
Is this just the same old, same old? Is it going to drop back yet again? Its high last week was 1.0583. It just now touched 1.0590. If you look at the daily chart below, you can see the pair was in a summertime range of 1.0592 to 1.1125. So it’s not unexpected that it will falter as it approaches that range. That’s resistance.
Can it make it above there? Yes, if the traders bullish on this pair can prevail over those who are bearish. For those traders to prevail, the pair needs the breakout buyers that might buy if it pokes its pointy little head into the range. This would help the pair gain momentum. Once safely and decisively in the range the next serious resistance will be at the top of the range at 1.1125. Which would be a very sweet trade, right? Hah! Fat chance, the bears say.
Is it a good short at 1.0583/92? One could make a case for it generally. Since I’m long and in profit (I’m getting ready to move my stops again), I will not do short unless lower time frame charts are compelling. Here’s the daily chart:
If you look back in this blog, you see I’ve been trading this pair since October 15. At first it looked as though I was just buying low and hoping for the best. Not me. I don’t take hope trades. I buy because of evidence and then I wait to see what happens. Last week I took some profits at 200 pips. It then rose close to 300 pips and fell heavily, stopping out my remaining position at 100 pips on Thursday. At that point I went long again with two trades and explained why in the blog that day.
Is this just the same old, same old? Is it going to drop back yet again? Its high last week was 1.0583. It just now touched 1.0590. If you look at the daily chart below, you can see the pair was in a summertime range of 1.0592 to 1.1125. So it’s not unexpected that it will falter as it approaches that range. That’s resistance.
Can it make it above there? Yes, if the traders bullish on this pair can prevail over those who are bearish. For those traders to prevail, the pair needs the breakout buyers that might buy if it pokes its pointy little head into the range. This would help the pair gain momentum. Once safely and decisively in the range the next serious resistance will be at the top of the range at 1.1125. Which would be a very sweet trade, right? Hah! Fat chance, the bears say.
Is it a good short at 1.0583/92? One could make a case for it generally. Since I’m long and in profit (I’m getting ready to move my stops again), I will not do short unless lower time frame charts are compelling. Here’s the daily chart:
© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
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