USDCAD—Long again

My two long trades from last week were profit stopped out at +100 and +10 pips respectively during yesterday’s dip.

I bought again yesterday at 1.0563 and, this morning, moved my stop to ten pips over breakeven. On the three-hour chart, the overall trend is up with higher highs and higher lows but there has been a short-term correction. 1.0567 and 1.0490 are support levels (the short-and longer-term uptrend lines). If the pair dips, I’ll probably buy again, depending on what else is going on.

What bothers me on the three-hour chart is the RSI. While it hasn’t become greatly oversold (below 30) on the dips, it also needs to push back above the trend line. In addition, there’s a potential evening star forming after a small uptrend. I’ve circled this on the chart. The current candle needs to complete as a black candle that closes well inside the long white one two candles back to confirm the pattern.

One concern this week is that in the USA it’s a holiday week with Thanksgiving on Thursday. Moves, especially those during USA trading hours as the week goes on, are likely to be insignificant for next week. Of course, that doesn’t mean these moves can’t and won’t take out stops. Just one of the realities of trading. I usually don’t trade around major holidays. For one thing, it’s a time for other things such as eating too much and reading (or watching movies about) heartfelt and sentimental family stories that have nothing to do with reality. For another, give it a break already. Taking a day or two off from trading can be very healthy.

Here’s the three-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.