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USDCAD trend reversal?

  • #2,301
  • Nov 12, 2007 12:25am Nov 12, 2007 12:25am
Forex sucks. It always goes against me. I have been in long since it was 1.05. I thought it would reverse. But it kept going down and down. I finally decided to close my positions when it was 0.92. I lost $2500 but I really thought I will go down more. So I closed my position and sold more and more usd/cad. And
it is now going up right after I closed my position and sold usd/cad. WTF. I'm losing another $800 now. I just hate this. I hate Canada. This country should be ruined and usd/cad should go up to 10.00
When I buy it, it moves down. When I sell it, it moves up.
  • #2,302
  • Nov 12, 2007 12:35am Nov 12, 2007 12:35am
Is this indeed a Reversal? or just a retrace?

Last time I heard a government (NZ) complained about their strong currency, they intervened and it dropped - only to find itself bought up again to new highs.

Lately, USDCAD seems reversing, but is it? It touched 0.9050 and looked poised to strike 0.8s when last week, we got massive sub-prime worries that sent most currencies down vs USD.

GBPUSD, EURUSD, AUDUSD, NZDUSD, XAUUSD (aka gold), OIL, all dropped against USD. Only JPY and CHF did not and according to a good analyst if this happened, its callled Carry Unwinding.

Can the CAD government truly affect the outcome of USDCAD? They can if they are indeed hell bent on selling and selling CAD until no one can buy anymore... But if they cant do this, expect USDCAD to drop again.

I bet, once the carry unwinding stops, the above currencies will resume their USD selling once again.
  • #2,303
  • Nov 12, 2007 1:42am Nov 12, 2007 1:42am
We all hate canada, there's no argument there. It's not like youre saying anything novel, like. Of COURSE you hate canada.

The problem is that you are unlucky, and trading based on what looks like a flipped coin, which is not bad if at least you reverse when you go wrong. but no..you had to go in with a tough head, eh?

Advice: learn from the charts and go in on familiar activity patterns. The move up was a little abrupt, but you could have caught it. And yes it is likely to continue, albeit in waves/stages.

Good luck.

Quoting pujolshomerun
Forex sucks. It always goes against me. I have been in long since it was 1.05. I thought it would reverse. But it kept going down and down. I finally decided to close my positions when it was 0.92. I lost $2500 but I really thought I will go down more. So I closed my position and sold more and more usd/cad. And
it is now going up right after I closed my position and sold usd/cad. WTF. I'm losing another $800 now. I just hate this. I hate Canada. This country should be ruined and usd/cad should go up to 10.00
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #2,304
  • Nov 12, 2007 1:45am Nov 12, 2007 1:45am
Quoting BurgerKing
Is this indeed a Reversal? or just a retrace?

Last time I heard a government (NZ) complained about their strong currency, they intervened and it dropped - only to find itself bought up again to new highs.

Lately, USDCAD seems reversing, but is it? It touched 0.9050 and looked poised to strike 0.8s when last week, we got massive sub-prime worries that sent most currencies down vs USD.

GBPUSD, EURUSD, AUDUSD, NZDUSD, XAUUSD (aka gold), OIL, all dropped against USD. Only JPY and CHF did not and according to a good analyst if this happened, its callled Carry Unwinding.

Can the CAD government truly affect the outcome of USDCAD? They can if they are indeed hell bent on selling and selling CAD until no one can buy anymore... But if they cant do this, expect USDCAD to drop again.

I bet, once the carry unwinding stops, the above currencies will resume their USD selling once again.
As I said in another thread, we've got about 1000 pips (roughly) to go on the carry pairs before the bull trend would be considered broken.
Patience + Humility + Study = Success
  • #2,305
  • Nov 12, 2007 1:49am Nov 12, 2007 1:49am
Canada > ALL baby!
{spam removed}
  • #2,306
  • Nov 12, 2007 2:06am Nov 12, 2007 2:06am
Quoting Plutonite
And yes it is likely to continue, albeit in waves/stages.
What exactly makes you think that it is likely to continue?
  • #2,307
  • Nov 12, 2007 2:25am Nov 12, 2007 2:25am
Quoting Subdude
What exactly makes you think that it is likely to continue?
Weekly chart patterns, no new fed cuts in sight, historic lows on dollar, 2000 pips down on USDCAD with almost no retracement until last week. Given this price action, it is quite sensible to assume some temporary dollar strength.

This does NOT mean that you should buy this exact moment (in fact I think the extremely fast buying is about to face some profit taking/partial pulldown right now) but it is just an outlook determined by price action and an understanding of the market. Good luck.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #2,308
  • Nov 12, 2007 3:25am Nov 12, 2007 3:25am
Quoting Plutonite
Weekly chart patterns, no new fed cuts in sight, historic lows on dollar, 2000 pips down on USDCAD with almost no retracement until last week. Given this price action, it is quite sensible to assume some temporary dollar strength.

This does NOT mean that you should buy this exact moment (in fact I think the extremely fast buying is about to face some profit taking/partial pulldown right now) but it is just an outlook determined by price action and an understanding of the market. Good luck.
I suppose my understanding of the market may be flawed. However, the fact that the dollar has been at historically low levels, that there has been little to no retracement since August, and the assumption that the fed is not likely to cut again soon (I would say the latter is highly debatable) are not reliable indicators of a trend reversal. Let us see CAD fall for two weeks straight before the word reversal gains some weight behind it.

With respect to fundamentals - as Dutchtrader pointed out, it will be hard CAD to be cheap once oil clears the $100 mark, which is a still a possibility, as the value of canadian currency is obviously tied to oil prices not in a small way. And given that the coldest months of the year are just ahead of us, I would take a wild guess and say that oil demand should likely increase in the near future.
  • #2,309
  • Nov 12, 2007 3:38am Nov 12, 2007 3:38am
Quoting Subdude
I suppose my understanding of the market may be flawed. However, the fact that the dollar has been at historically low levels, that there has been little to no retracement since August, and the assumption that the fed is not likely to cut again soon (I would say the latter is highly debatable) are not reliable indicators of a trend reversal. Let us see CAD fall for two weeks straight before the word reversal gains some weight behind it.

With respect to fundamentals - as Dutchtrader pointed out, it will be hard CAD to be cheap once oil clears the $100 mark, which is a still a possibility, as the value of canadian currency is obviously tied to oil prices not in a small way. And given that the coldest months of the year are just ahead of us, I would take a wild guess and say that oil demand should likely increase in the near future.
That is a valid opinion, but the fact that prices are already showing heavy buying leads to the viable possibility of some dollar-gain across all charts and not just this one. It's not just about being at historic lows, it's about the price activity agreeing with the sentiment.

As for oil, I don't think it got any cheaper this week, but the dollar rocketed against the loonie. They are tied, but not as much as you think. Remember that the canadians need to export many things to the US, some of which have a far more elastic demand than oil. The government can intervene quite easily if it thinks the pricing of the CAD is hurting the economy.

I see no major trend reversal yet, maybe a few hundred pips of dollar strength, but that's all my charts tell me right now. I do not know the future nor care to predict beyond what my charts imply according to some high-probability patterns.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #2,310
  • Nov 12, 2007 3:58am Nov 12, 2007 3:58am
I hate Canada. I am in Canada but I have to say this.

There are so many car jackers and burglars. Why are there so many car thefts? Vancouver is auto crime capital in North America. 6000 cars were stolen and 12,000 cars were bronen in just in Vancouver and Surrey last year. Just three months ago an a$$hole broke in my car and stole my streao system. I called the police and they just asked my address and when it happened. And that was it. WTF? A friend of mine got his car stolen a year ago and the other's car has been broken in twice. A year ago, I just read an article and a man who stole more than a hundred cars was sentenced just six months in prison. It is just so gay. I'm sick of it.

Many of the burglars do these to buy drugs. Of course there are many drug addicts in the States but it is nothing compared in Canada. The police here are stupid. My neighbours were openly smoking pot a few months ago and I called the police and they just told me it is not illegal in Cadada. WTF. The RCMP is just stupid. I saw them pulling a carjacker over. They didn't even handcuff him until the car was towed and they even let him smoke cigarettes.
When I buy it, it moves down. When I sell it, it moves up.
  • #2,311
  • Edited 5:27am Nov 12, 2007 4:10am | Edited 5:27am
i absolutely agree with you. i have lost $8000 since I too long at 0.95 and was stopped out at 0.91 !!!!!!! and it rebounded sharply to 0.95 now all that within a week i should not have placed a stop loss !!!!



Quoting pujolshomerun
Forex sucks. It always goes against me. I have been in long since it was 1.05. I thought it would reverse. But it kept going down and down. I finally decided to close my positions when it was 0.92. I lost $2500 but I really thought I will go down more. So I closed my position and sold more and more usd/cad. And
it is now going up right after I closed my position and sold usd/cad. WTF. I'm losing another $800 now. I just hate this. I hate Canada. This country should be ruined and usd/cad should go up to 10.00
  • #2,312
  • Nov 12, 2007 8:40am Nov 12, 2007 8:40am
with the DJIA crossing below its 200 MA on Friday, there is reason to believe that the DJIA and American equity markets will sell off for a while, maybe 3000 to match the 1987 decline in % terms, my guesstimate. Another author said, the Yen is no longer correlated on the charts to the DJIA, so I'm guesstimating that Oil will go back down to $80/barrel and allow the CAD to test resistance at around 1.000.

No reason to lose hundreds on this market if you are drawing trend lines, support and resistance lines. Be ruthless with your stops, try 3 minute charts with the trend lines, when it violates those, initiate or close a position according to your heart condition.
  • #2,313
  • Nov 12, 2007 12:30pm Nov 12, 2007 12:30pm
Quoting joey007
i absolutely agree with you. i have lost $8000 since I too long at 0.95 and was stopped out at 0.91 !!!!!!! and it rebounded sharply to 0.95 now all that within a week i should not have placed a stop loss !!!!
Joey,

Your post is saddenning and uninspired, the intention of my post is not to rub it in, but to encourage you to try and be a winner rather than blaming the market for something which you are the only one that may be held liable for.
Forex doesnt suck, you are just a sucker. Were you taking a position trade from a 5 minute chart, or did 0.9500 just sound like a fun place to go long because this price is so 'low'? I would like to hear the reasoning behind your trade and your inability to mark a hard stoploss on your chart? The inability to place a stop, to me always translates to a person that simply is unable to admit he is wrong. Face yourself, before you face the masses.

Examine the charts attached to this post. Now go to the James 16 Chart thread under Forums > Trading Systems and read thoroughly through the posts, then jump into a very very cold swimming pool. To sum that thread up in two words: "Pure Gold". Investigate the information you'll find there for a couple of months using small lots for testing.. do not regress to demo trading (not that I believe you will, I mean you want the big kahuna bucks, right?) and before you know it, you are going to have somewhat of an edge in these wild markets.

Once you "have it down", get rid of that feeling immediately and remind yourself you're gonna be wrong many more times. You're probably gonna join the James16 Group because that will be one of your detrimental steps towards some success.
Develop a system with robust money management around what you will learn there. Now you are no longer behind.. Provided you rid yourself of the Lucky Dip mentality.

While you were losing $8000 I've been cashing in from the 1.0400's. First you must find a money managment system that you are comfortable with and is _realistic_ for your trading abilities or you will simply continue to provide healthy liquidity into the market. e.g Fixed Fractional, Fixed Ratio, Kelly's Value and others. If you don't want to use stops you are going to need to trade such minute amounts that hundreds or possibly thousands of pips will surmount to only small losses (and gains) .. This is not the purpose of tradable instruments. The purpose is to extract money out of the market, not peanuts, on a regular basis, so you can sip fine congac with bobblong, before you are too old to actually have an erection.

If you hate me, that's OK.

Bob
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  • #2,314
  • Nov 12, 2007 1:00pm Nov 12, 2007 1:00pm
Bob, really appreciate your comments bro.
I really need to learn how to read charts because I thought the USD/CAD hit the bottom of the support line at 0.95 hence should have bounced up from that support.

How did you know it's a pivot in the bearish direction and not a rebound off support at 0.95?
You mentioned a bearish outside bar? Can there be a bullish outside bar and if that bar was bullish at that 0.95, would that mean the pivot will be to the bullish side?

What action did you take at 1.04? long or short?
Is it too late to go long at 1.065 now that the it has passed through support line again?
Is there a trend reversal or would it be best to trade the long term established trend now to test the 0.905 mark again?
very disheartened.
it's not the first $8000 I've lost


Quoting bobblong
Joey,

Your post is saddenning and uninspired, the intention of my post is not to rub it in, but to encourage you to try and be a winner rather than blaming the market for something which you are the only one that may be held liable for.
Forex doesnt suck, you are just a sucker. Were you taking a position trade from a 5 minute chart, or did 0.9500 just sound like a fun place to go long because this price is so 'low'? I would like to hear the reasoning behind your trade and your inability to mark a hard stoploss on your chart? The inability to place a stop, to me always translates to a person that simply is unable to admit he is wrong. Face yourself, before you face the masses.

Examine the charts attached to this post. Now go to the James 16 Chart thread under Forums > Trading Systems and read thoroughly through the posts, then jump into a very very cold swimming pool. To sum that thread up in two words: "Pure Gold". Investigate the information you'll find there for a couple of months using small lots for testing.. do not regress to demo trading (not that I believe you will, I mean you want the big kahuna bucks, right?) and before you know it, you are going to have somewhat of an edge in these wild markets.

Once you "have it down", get rid of that feeling immediately and remind yourself you're gonna be wrong many more times. You're probably gonna join the James16 Group because that will be one of your detrimental steps towards some success.
Develop a system with robust money management around what you will learn there. Now you are no longer behind.. Provided you rid yourself of the Lucky Dip mentality.

While you were losing $8000 I've been cashing in from the 1.0400's. First you must find a money managment system that you are comfortable with and is _realistic_ for your trading abilities or you will simply continue to provide healthy liquidity into the market. e.g Fixed Fractional, Fixed Ratio, Kelly's Value and others. If you don't want to use stops you are going to need to trade such minute amounts that hundreds or possibly thousands of pips will surmount to only small losses (and gains) .. This is not the purpose of tradable instruments. The purpose is to extract money out of the market, not peanuts, on a regular basis, so you can sip fine congac with bobblong, before you are too old to actually have an erection.

If you hate me, that's OK.

Bob
  • #2,315
  • Nov 12, 2007 1:02pm Nov 12, 2007 1:02pm
Quoting joey007
i absolutely agree with you. i have lost $8000 since I too long at 0.95 and was stopped out at 0.91 !!!!!!! and it rebounded sharply to 0.95 now all that within a week i should not have placed a stop loss !!!!
Maybe you can explain why you took a long trade with USD/CAD in the first place?
  • #2,316
  • Nov 12, 2007 1:28pm Nov 12, 2007 1:28pm
maybe you can help enlighten me in the blog above .... my reply to bobblong
thanks mate

Quoting fx_amateur
Maybe you can explain why you took a long trade with USD/CAD in the first place?
  • #2,317
  • Nov 12, 2007 1:41pm Nov 12, 2007 1:41pm
Well , the question is what you think the trend with USD/CAD is? My opinion is that it is a downtrend and it has been a downtrend for a long time , for many many months so if you continue taking countertrend positions you are not very likely to succeed ever
  • #2,318
  • Edited 2:17pm Nov 12, 2007 1:44pm | Edited 2:17pm
Joey,

I don't want to put words into Bob's mouth, but I'm guessing that we was not saying that it was a pivot in the bearish direction, but rather that your stop could have been placed below the pivot (or more likely 0.9500) to avoid the $8000 loss when it turned out to be more than a bounce off of the support and the bearish trend continued.

I'm still very new at this (this is my first post at FF), but hopefully you'll stay in the game and get help from all the great traders that post at FF. I would definitely agree with Bob that checking out the James 16 Chart thread is an excellent place to start (definitely read the WHOLE thing - it's worth it). Due to my lack of experience, my charting knowledge might be minimal and blown off by some, but I'm hoping my support will be accepted since the support shown by most traders at FF is why I love these forums so much.

Keep a positive attitude and good luck with your trading!

-Brian

Quoting joey007
Bob, really appreciate your comments bro.
I really need to learn how to read charts because I thought the USD/CAD hit the bottom of the support line at 0.95 hence should have bounced up from that support.

How did you know it's a pivot in the bearish direction and not a rebound off support at 0.95?
You mentioned a bearish outside bar? Can there be a bullish outside bar and if that bar was bullish at that 0.95, would that mean the pivot will be to the bullish side?

What action did you take at 1.04? long or short?
Is it too late to go long at 1.065 now that the it has passed through support line again?
Is there a trend reversal or would it be best to trade the long term established trend now to test the 0.905 mark again?
very disheartened.
it's not the first $8000 I've lost
  • #2,319
  • Nov 12, 2007 1:58pm Nov 12, 2007 1:58pm
Quoting joey007
maybe you can help enlighten me in the blog above .... my reply to bobblong
thanks mate
All the price action terminology I was referring to can be found in the thread I mentioned above. Regarding your second question, we can see that ~0.9520 was tested twice before being broken, marking a new support, later made resistance. After this support was broken, price fell to around 0.9400 and retraced to test the previous support level, but now as resistance..(~0.9520) So once we see a level being tested once.. we can start drawing a horizontal line there and watch for further tests.. the more it was be tested before breach the more significance this level will hold in the future once tested from the other direction, so we keep that line there for a heads up. Basically going long at 0.9500 is on par with driving into a brick wall with a `72 VW buggie.. I can only imagine the amount of sell limit orders right at this level. Also note the descending triangle quite easily visible at this level on the 4hr chart (flat support level with price making lower highs) We have two confirming multi-bar patterns which are both classics.. a descending triangle and a two-test followed by a breach. After these patterns worked, price came back to test this level to form a bearish outside bar (single bar pattern), when when broken many times leads to a nice continuation of trend.


Bob
  • #2,320
  • Nov 12, 2007 2:15pm Nov 12, 2007 2:15pm
Say what you will but in three sessions this pair has made 600 pips back from its lows. You can try and retrofit all kinds of indicators and chart patterns to this move to make it seem logical, but to me it is still an anomaly. Maybe the Chinese were really bluffing and are now doing just the opposite of what they announced, i.e. buying up dollar since it was at subterranean levels? No matter - the higher it climbs the harder it falls.
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