More downside for USDCAD? But wait!
On a Daily Time frame, USDCAD is definitely on the downtrend. Major support is at 1.286 where we might be able to see a longer term reversal. However, before price heads to 1.286, it could do a short term rebound to 1.314 first.
Thus there are 3 trading set up we can consider for USDCAD.
Option 1: We assume price will head to 1.286 without rebounding to 1.314.
Pros : Following the trend.
Cons: There's no safe place for an SL. The nearest I could think of is 1.310. With current price at 1.299, we only have a potential profit of about 100pips. Not worth the risk.
Option 2: We assume price will rebound to 1.314. Take the long trade.
Pros: Potential 160 pips profit. SL can be around 1.290. This give us a better risk to potential reward ratio.
Cons: Counter Trend is always an additional risk. Weak NFP result on 03Aug18 .
Option 3: We assume price will rebound to 1.314. We wait for price to rebound first then we take the short trade at 1.314.
Pros: Potential of 275 pips from 1.314 to 1.286. Low risk.
Cons: Patience is required to wait for price to rebound first. It might not even rebound.
There's a 4th trading set up exists which is to take both option 2 and 3. Of course price can move anyway it wants outside of our options. That is beyond of anyone's capability to predict. However, by looking at possible trade setup that could occur, we can pre-plan our move before it happened. As the saying goes,
"Plan your Trade and Trade your plan" =)
Personally, I would go with Option 3 as it has the lowest risk. So what if price do not rebound to 1.314? Simple, we simply miss this trade at no loss. It's always better to miss a trade rather then chasing the price at high risks.
Have a good weekend everyone!
Thus there are 3 trading set up we can consider for USDCAD.
Option 1: We assume price will head to 1.286 without rebounding to 1.314.
Pros : Following the trend.
Cons: There's no safe place for an SL. The nearest I could think of is 1.310. With current price at 1.299, we only have a potential profit of about 100pips. Not worth the risk.
Option 2: We assume price will rebound to 1.314. Take the long trade.
Pros: Potential 160 pips profit. SL can be around 1.290. This give us a better risk to potential reward ratio.
Cons: Counter Trend is always an additional risk. Weak NFP result on 03Aug18 .
Option 3: We assume price will rebound to 1.314. We wait for price to rebound first then we take the short trade at 1.314.
Pros: Potential of 275 pips from 1.314 to 1.286. Low risk.
Cons: Patience is required to wait for price to rebound first. It might not even rebound.
There's a 4th trading set up exists which is to take both option 2 and 3. Of course price can move anyway it wants outside of our options. That is beyond of anyone's capability to predict. However, by looking at possible trade setup that could occur, we can pre-plan our move before it happened. As the saying goes,
"Plan your Trade and Trade your plan" =)
Personally, I would go with Option 3 as it has the lowest risk. So what if price do not rebound to 1.314? Simple, we simply miss this trade at no loss. It's always better to miss a trade rather then chasing the price at high risks.
Have a good weekend everyone!
Trade active:
It seems we might be heading to 1.314 (option 3).
Keep an eye for 1.310, it could turn there. You can probably trail your entry from 1.310 to 1.314. Only enter when you see bearish candle appears on lower time frame (such as 1H, 4H)
Keep an eye for 1.310, it could turn there. You can probably trail your entry from 1.310 to 1.314. Only enter when you see bearish candle appears on lower time frame (such as 1H, 4H)
Trade active:
Congrats to people who took Option 2!
Trade active:
Option 3 took place. Short trades are in!