Whoa! I am continuing with my averaging strategy and will look to add another order somewhere in the 11's. Starting to wonder when a rally will ever occur and what the catalyst will be... but in a few weeks I think I will have profits.
Is this the relief rally that has been so anticipated? Well currently the usdcad has no broken yesterdays highs and there is no clear bottom formation on the charts. However since I missed the buy overnight and I am very optimistic about this current up move I will be looking to buy usdcad on any 15-20 pip dips below 1200 for a target in the hi 1200s to low 1300s (or around where the 20 EMA on the daily chart might be) but I am being cautious and not putting limit orders to buy because US GDP is scheduled for release tomorrow.
Is that suppose to be an insult... I'm in averaging mode... I'm just sticking to my plan to try and capitalize on these oversold conditions. My situation won't allow me to watch around the clock for pinpoint entries so I'm making sure I'm in the market and don't miss the move.
Check out the latest hourly chart on the usdcad Cup and handle has formed at the top of this hourly channel The violation of the channel on the upside has not seen any short term momentum on the flip side there was no momentum on the violation of the channel on the downside Dollar relief rally before the US GDP number My plan is to keep the channel in play and short in this alow 1200s area with a stop above the first standard fib retracement (38.2) however if the USDCAD powers through the first retracement I see momentum through the 2nd standard fib retracement (50%) and maybe a rally to the last channel touch on the upside (around 1300) Bear in mind this could happen over night, but I do not suggest taking a position close to the release of the US GDP
also a friendly reminder Bank of Canada says that their rate decision is inline from what they see from their numbers and the economic situation of Canada, plus they hinted that another rate hike in the near future is unlikely Oh yeah and they also implied that there is a TYPE 1 situation occuring in Canada where its economy and currency valuation is driven only by commodity pricing ... thus suggesting that the Canadian economy and currency is at commodity valuation risk Is this a good thing or bad thing for USDCAD longs? I am not quite sure
Alright... its your money. I dont understand what the point of having plan is if you just keep averaging until your right... I will tell you when to take profits.
Based on how oversold this technical picture is, and the fundamental backdrop developing behind the scenes, I would say you are safe at the moment. But averaging down or up is the second worst thing an FX trader can ever do.
Thanks for the help apex - just holla at me via PM. I just hope your exits are as smooth as your entries. I'm not just going to average until I'm right. I said I would take one order in the 12's, 11's, and 10's if it got there - thats it. And I'm not sure I agree with the statement that the worst thing for an fx trader to do is average down...
What you dont realize is that 7 times out of 10 my trade would have resulted in a 10:1 or more reward to risk ratio. It just so happens that you cant win them all... hence the comment about a low risk entry when it is seriously countertrend. You obviously have not been trading fx long if you think you can average down in an impulsing market just because you think and hope its going to rally.....