USDCAD

It's no surprise that as the Euro and Cabble climbed this morning, USDCAD slumped. It dropped below one of its uptrend lines which is not good news. However it held above the round number of 1.0600 again, as it did last week. If it closes below that level, and particularly below the 1.0580 level I identified last week, the trend line off the low will be exposed.

Nothing like waking up on a Monday morning and seeing your trade that was healthy on Friday be slightly underwater. This is why you have to have tight stops--it can't go too much below where it was to stop me out. In any case, once the pair held above 1.06 on the lower time frames, I opened a new long. Live by my analysis; die by my analysis, LOL. The market will tell me soon enough if I'm wrong.

Why didn't I move my stop to breakeven on the trade on Friday when it was 60 or 70 pips up? I could have, maybe should have. Anyone who reads this regularly knows I do often move to breakeven as soon as I can. I was in meetings most of Friday, though, and didn't watch the trade. Volatility being what it is, though, I'm not completely surprised by the move down again, especially if the pair is, in fact, basing. I'm comfortable with taking the loss if I have to do so.

Here's the 3-hour 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.