trade

How to Trade the USD/CAD Forex Pair

in this video we're going to take a look

at the US dollar Canadian dollar

exchange rate why is it so popular and

how to trade it hello I'm David Jones

from capital comm and this is the latest

in a series of videos where we look at

popular markets today we're going to

take a look at the dollar Canadian

dollar exchange right look at why it's

so popular go through some of the things

that drive this market and place a trade

with a stoploss so you can see how it

all works but first of all let's have a

quick catch-up with the typical

volatility so we'll go on our platform

then I'll come back and talk a bit more

about this currency pair let's take a

quick look at the chart for a dollar

Canadian dollar and then we'll have a

look at the currency pairing a bit more

depth come back to the chart and I'll

show you how to place a trade but I've

gone for a long term view here so this

is why it's popular with longer term and

shorter term traders so from the lows in

2018 around about 1:22 so if dollar was

buying one point two Canadian dollars

the market traded up to 136 so we saw a

fourteen hundred point move and move in

excess of ten percent that's US dollar

strength we're seeing there so that's

the really longer-term view let's take a

look at the short-term as well to see

why day traders like this market so here

we're looking at what just the last

couple of days and the dollar Canadian

dollar exchange rate has gone from about

130 140 that sort of area down as low as

130 65 so we've seen a move in excess of

70 points over sort of a less than 48

hour period so it's clearly short-term

volatility like this the traders really

want in markets what we're going to talk

about now some of the things that drive

the Canadian dollar how to trade it then

we're going to come back on the chart

and place a trade so dollar Canada is

the exchange rate of the US dollar to

the Canadian dollar so if in the markets

trading at one point three zero zero

zero it means that one US dollar buys

one point three Canadian dollars the

same as any other exchange rate I think

the Canadian dollar similar I suppose in

a way to the Australian dollar it's a

commodity

driven currency you know the economy in

Canada is is quite dependent on things

such as oil exports natural gas and even

lumber so if we see moves in these

markets they will have an impact usually

on the Canadian dollar exchange rate as

well like many other popular FX markets

it's widely traded seems a lot of volume

it's reckoned to be about the fifth or

sixth most popular traded currency pair

out there so sees lots of volume in the

market and what that means as traders is

that you have tight spreads so you are

the cost of buying and selling is

relatively low compared to some other

markets and usually means it's pretty

volatile you know we had a look on the

charts and even maybe over a couple of

quiet days we do still see some decent

moves so those are some of the reasons

why it's a popular market when it comes

to trading dollar canada you trade with

US trade contracts for difference CFDs

now that may well be a term you're

familiar with there are two main things

to be aware of when trading us using

CFDs you trade using leverage so in

effect you get more bang for your buck

traders have been using leverage for

decades and it's where a small sum of

money controls a much bigger financial

position so that's great when you're

right on market direction but of course

if you're magnifying your profits

you're also magnifying your losses so

it's more important than ever to use

risk controls such as stop losses and

we'll do that when we place a trade the

other benefit of trading using CFDs you

can trade markets in both directions so

you think the dollar is going to gain

against the Canadian dollar you'd buy

but if you thought actually the dollar

is going to fall and the Canadian dollar

is gonna rise you can sell short and

it's having this flexibility that's very

important when it comes to trading but

let's place a trade let's get back into

it go on the platform and place a trade

so you can see how it all works so we're

back on the show now I flipped this over

to an hourly chart so each of these

candles represents an hour's worth of

trading let's say I want to replace a

trade and I was going to speculate that

maybe we're gonna see the rate increase

you know we saw it drop a few days ago

down as low as 130 60 the market bounced

back about 80 points

we're back down at these level

so I'll take the view I think the

markets going to go out let's place the

trade I'll go to the top right up here

to buy click on buy and it opens up my

dealing ticket let's say I'm gonna put

my stop-loss below these lows so

somewhere the other side of 130 60 I'll

choose 130 30 so let's put close at a

loss I'll click on that and I'm gonna

choose 130 30 so my stops in what I can

do now if I want to I can reduce my size

at the moment I'm trading 12000 you can

see it here in the size at the top let's

say I don't take on that level of risk I

can trade a lot smaller you can see I

can trade from as low as a thousand

let's do that so let's set out for a

thousand US dollar Canadian dollar my

stop is in at one thirty thirty my risk

is tiny if I get stopped out I'd lose

two pounds sixty or something on this

trade we're ready to go we'll click on

Buy and you can see the confirmation has

come there the bottom left of the screen

now if I go to portfolio on the left

hand side I've got quite a few trades

running in here from before if we click

on portfolio so here you can see all the

trades that are running on my account

from other videos that we've done in

this series and and other market

commentary videos down here right at the

bottom this is the latest one adjusted

buying a thousand US dollar Canadian

dollar the trade was done at one thirty

seventy two point seven the markets

currently trading at about one thirty

seventy my stop-loss is in my margin

I've got 26 pounds 49 tied up and there

is my running loss at the moment so of

course the stop-loss will sit there I

can close the trade whenever the markets

open so if I changed my mind I can just

click on close now and close that trade

out but we'll leave it running and see

how it performs over the next few days

but but trading this market this

volatility it's as straightforward as

that to put these risk management

controls in place using stops of course

it's important to understand the trades

we do in these videos they aren't

financial advice they're just for

educational purposes only just to show

you the

Kanaks how trading on our platform works

that's it for this quick update on

dollar Canadian dollar to find out more

about the market and contrast a

difference just go to our website

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we'll wrap things up there so from me

David Jones and capital com good luck

with your trading

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