USDCAD trend reversal?

Well as can be seen was very wrong on the Cad. Wow!

What is going on in the North country that core inflation jumped so much? Quite the suprise.

update: Sold Euro/Cad at 1.3700 again. One can always get back on board. The difference in inflation rates between Europe and Cad is a lot projecting for increases in Cad interest rate differentials. This pair could really go far based on this mornings data.

Breakeven stop is at entry. Market is all over the place today.

Thanks for yer E sell tip yesterday ( looked @ H & 4H TFs: they appeared to be sym triangles in downtrend {bearish} so I shorted & was ticked when $ broke up.) Kept the trade over night & awoke to a few fine pips today.

Hi,
Maybe this idea is worth considering when you put on a trade.
We all strive to nail the entry at the perfect moment in time when the risk is least and the profit potential is greatest. In real time this rarely happens. Always seems to be some thing or other that gums up the works. The emotion that rears up is Angst, sometimes it gets real large and can trigger an exit from the trade. Then we see the trade rocket in the direction we thought in the first place.

This happens enough that there may be a technique to deal with this recurring problem.

Consider using A.T.R. (average true range) for initiating an open position. This is a volatility indicator and using 1/2 x ATR of the time frame you trade becomes a measure of trade initiation volatility the trader is willing to endure as the cost of entry.

A commercial fisherman uses nets. They drop them overboard knowing that there is a potential to snag some object and lose those nets. Those nets have a cost but it is a tolerable loss as it is the operating cost of being a commercial fisherman.

Entry volatility has a cost as well. If it is seen as a cost of doing business, then it no longer is an obstacle.

If the trade then moves in the direction that one hopes for then implementing the actual trade stop would be warranted. This technique thus employs two stops. One for initial entry based upon volatility, then the second stop is there to deal with the ongoing trade as the trade action confirms direction.

Be sure to test this in a demo account first and make sure it is useful to the trading arsenal employed.

Hi Foto

I use a technique similat to yours when I am trading where there is no ready good spot to place my stops. I keep the amount to lose if wrong the same but reduce/increase the trade size based on ATR. This will ensure that you will be stopped out only if

 

1. market goes crazy (this happens from time to time)
2. You were dead wrong in the direction
3. You were not watching the market creep up to your stop slowly

Good morning Olu,

Simplicity is truly best.
Keeping constant portfolio risk on every trade then varying the quantity of open positions based on volatility. Good stuff!


I would add one more thought to my prior post. The question left unanswered was when does the trader know entry to the trade is confirmed, time to let it run?
Since entry risk exposure is based upon volatility, if the trade is not stopped out for one period of the time frame being traded. Then that would be confirmation. Time to put on full trade risk.

ie: Trader is trading dailies. initial risk is 1/2 daily ATR upon entry. Thus a 50% retrace of the daily move is considered acceptible risk. If the entry criteria actualy is meaningful to the trade and gives good low risk entry then any violation of that initial risk says the trade is not doing what was expected. Time to get out.

The trade progresses thru the day, never got stopped out. One time frame (1 day) passes. So far so good. the trade is now confirmed as being one worth keeping on. Time to put on full risk to allow the trade to go forward. Maybe the trader uses 3 x atr as a trade stop.

We have moved beyond entry criteria, and now are into the actual trade.
Nothing more to do but watch and tend to business.

As USDCAD approaches 1.02...will it now be resistance....or will it break through for a retrace before the move down to parity. My charts have only one trendline on the daily....I could see a retrace to there.

As well....GBGUSD at 1.5000, EURUSD at 1.3500...USDCAD at 1.0200....EURGBP at 0.9000...EURJPY broke below 124.000, so everything that i watch at or near a key level....this week should be interesting....and I'll be looking for a trade where everything moving in unison.

Cheers
CanuckCT

my analysis for usd/cad

Great post & sound reasons. The more info we are able to process to make our informed decisions leads to more pips.

I agree that loonie should retrace. But the way the fundies are- I suspect not too far.

The last COT ( my take only): futures (CAD) MacD is up & > sig & H20.
STO is O/B & curling slightly down.

COMMs are increasing their short positions ( my read is that the US/CAD pair should go down.

I shall sell rallies in the down trend.

The US/Cad W chart : Nov 10-Jan 10 up TL was broken. W candle was dragonfly & $ @lo BB
The Mly MacD is down (<sig & H20 lines). $ still in down trend.

Keep to shorter TFs.

Sentiment:- Bearish
Reason:-

1. Fundamental – its fundamental is very strong.
2. Technical – The major trend is down, but having pullback. There are some signals of bearish reversal:
   1. H1 chart – T/S crossed K/S downward
   2. H4 chart – There is a Abandoned Baby bearish reversal formation.

To do:-

1. Ichimoku trend trading – I will monitor the movement of USDCAD on H1 and H4. If C/S can cross the T/S and K/S downward, I think USDCAD will resume its bearish journey.
2. Pivot Point trading – No intraday trading due to pullback.http://myinvest888.files.wordpress.c...ng?w=484&h=248
3. Income Generator – Yesterday bar is an activator day. Sell Stop = 1.01423 and Stop Loss = 1.02473

http://myinvest888.files.wordpress.c...if?w=484&h=247

Beauty post. Great charts.

Nice to read someone else Bearish.

The last 2 D charts indicate to me that the bulls/bears are fighting in order to achieve direction.
1.0285 maybe, then parity.

my analysis today

USD index broke above the weekly channel it has been trading in for past six weeks this morning.
Germay is signaling that Euro cohesion is not all that important to it. Being an exporter it views its future as a global competitor of greater National importance then its relations with other EU members. Possibly they equate the Euro as being the new Deutchmark. This remains at odds with the rest of Euro members who view the currency through their own eyes.

I remain short the Euro from the break of 1.3600 and may add to position as the week progresses. Todays move does not appear to be over yet. Just broke thru the lower B.B. of 2.5 Std deviation on the daily charts. 20 period sma
There was a small bounce at that level from profit taking but the selling pressure has pushed it back down and just made a new low for the day.

Initial profit target is the 1.3000 level.

The stronger dollar will have an impact. All the bullish news out of Canada is countered by the stronger USD. The USD/CAD should remain in a trading range until another clear direction manifests itself.

Am looking for price evidence that the USD is gaining traction over commodity currrencies in general.

Equities continue to be bouyed by the world stimulus packages, this non normal market condition is long term unsustainable. When does everyone head home from the commodity boom brought about by fiscal and central bank action will be the next big market mover.

Remaining neutral about commodity pairs, and looking for other market opportunities is guiding trading decisions.

Put on a short of AUD/USD with the break of 91.00 level. Going into Asia with the stronger USD may prove out.
Initial entry stop at 91.75. If holds thru nite then will put stop at .9242

Waited on this pair to act, probably longer then should have, but it had been strong and given losses for prior shorts.

The Euro appears to be gaining downward momentum and with it will go the commodity currencies.

The CAD is showing that it is not a one way trade. If it finishes the day near the top of days trade will go long USD/CAD.

8 hour/40 day chart shows pretty nice topping out action for AUD/USD

Evening FOTO:US/CAD looks good for retrace to maybe 0360 ( 50 ema). $ is @ 20 ema {both are down}. Daily STO is up.
MacD (< H2O & O/S) has X'd up its signal (bullish for retrace).

I shall scalp with buys tonight. I have not seen any indications of a reversal in this pair as yet, in the longer term. The best thing for me to learn was NOT TO BE MARRIED TO A POSITION. I still view parity in the loonie but will go long in order to add pips to my account.

The CAD is still strong -mega pips going long the BEAVER-.
Your comment re: com$, was appreciated warning. I shall pay more attention to the Oz, Kiwi & Loonie X's.

Still reaping pips from your post re: shorting the Euro (thanks).

Hi Scarecru,
Keep trading what works for you. There is an Author you might wish to check out. J.M. Hurst wrote some marvelous works on technical analysis.

"The Profit Magic of Stock Transaction Timing" presents an idea that frequent small trades has less risk and higher growth rates for an account.

Have always been fascinated by that thought but because of my personality have found it very difficult to implement sucessfully.

On a side note:
Hurst is normaly associated with cycles analysis but beyond that had much to contribute. "Traders Press" owns the rights to his cycles course
and publishes it. It is very well presented and with due diligence can be followed. It is a completely unique approach.

In Profit Magic you might find his concept on money management and trade risk beneficial to the way you trade.

I know that I would trade very differrently if short term moves were consistently possible for me to capture. If you are achieving that goal in your trading then with great money management you have the potential to make your fortune.

price is near the 200sma on the 30ma and daily S1. looks like it will bounce back up.

i got off the train too early for only +7 pips when it was ranging. looks like the next target is dp at 1.0233

Very erratic day in the USD/CAD almost seems as if it wants to move up strongly and then changes mind just as fast.

The action in USD/JPY is interesting. As the separation between U.S. and China gets larger, will Japan step in to fill the gap? Clearly the Obama administration is at odds with the status quo.
If they cannot deliver jobs and recovery by November the political winds will blow from the Republican side. There is no other saving grace in the works.

Stranger things have happened. Japan rides in as the White Knight to buy treasuries.

FOTO: as per usual; thanks for the information (I value knowledge- it allows one to make informed decisions for one's benefit). Unlike media control, that attempts to shape "thoughtspeak".

Interesting day-you mention Japan (you may find this post on the Yen informative-www.babypips.com/blogs/piponomics/japans_4_worst_headaches.html).

Re: "political winds...." the Ann Colter & the Nursery of Ottawa(universities here are fertilization clinics for LLs {left leaners}affair.
Then we have a group of Nursery of Saskatchewan professors who are aghast that a scholarship fund is offered for students whose fathers/mothers ( soldiers in the Canadian Armed Forces who have died while serving their country). This is an abomination as it ( in THEIR interpretation) GLORIFIES WAR. Thankfully, the grassroot response is so far negative.
Today, a FISCAL conservative entered Tornonto's mayoralty race. This councillor (a councillor's yearly budget is $53,000 not the salary).He spent -$700 in his budget ( i.e. he did not touch public money for his expenses) but put his own money in. This election is in Nov.

Mayhap, the Ants will tell the Grasshoppers where to place their fiddle come Nov.

Don't worry, you got + pips. That is all that matters

On D chart, I see sym Tri> in down trend.
On H tf may buy to 0340- but shall look @ 4H tf for sell.

Go to the TF you use & trade with it.

I know diddily squat so don't place too much emphasis here: