USDCAD followed a classically, beautiful path to its current high of 1.0689, up from where I bought at 1.0490 (199 pips). I lightened just a bit here but have much of the trade still on with, of course, a profit stop. If you read my blogs from the last few days you saw why I was comfortable buying again, using no fancy or mystical techniques but rather relying on classical technical analysis. The diamond pattern that appeared yesterday was frosting on the cake.
Anybody can make consistent pips in the market if they:
1) Do the analysis—this means putting in the hours studying charts
2) Exercise iron discipline as to entry points so potential losses are small.
3) Be patient
All this is easier said than done, of course. Otherwise everyone would just do it. Of the three steps above, the first, while requiring work, is actually the most straightforward. Discipline and patience are much harder to come by. I’ve had to consistently work on myself—my attitude, my awareness, and my emotions—to get to the place where I can maintain a reasonably detached demeanor in my trading. I still get annoyed; I still struggle with changing direction when I need to do so. But it’s easier than it once was and I’m a pretty stubborn person. If I can do it, anyone can. OK, that’s the end of the back patting for a nice trade. Satisfaction with oneself can also get in the way of successful trading. Time to shake it all off and move on.
Looking at the daily and three-hour chart, there are four logical resistance levels for the USDCAD:
Support can be found at 1.0450/66 and 1.0561/89.
Here’s the three-hour chart where I’ve marked resistance levels in purple. Let’s see if it can make it through the next one. I’ll be watching shorter time periods as well as momentum as measured by RSI.
© 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.