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How to Trade USDCAD – USDCAD Trading Strategy

hey Janice just want to bring your

attention to the dollar cad also known

as the Looney on the daily timeframe as

you can see here we are moving sideways

inching up very gradually as from

February 2019 however we do have

something of an impasse at the moment as

Friday closed as a bearish pinbar

reversal which is a bit of a signal but

what is it rejecting let's take a closer

look those of you who've been a member

of the service for more than a couple of

weeks you'll know all too while we're

currently already selling the dollar

index and also we are bullish on

precious metals not least silver as per

our recent trailer there in the members

area however looking at the dollar cad

on its own for itself on its own merit

we can see here that we do have Friday's

bearish pinbar reversal rejecting the

Fibonacci level of resistance to 786

which is widely regarded as the last

chance saloon if we are gonna be using

Fibonacci retracement levels as levels

of support and resistance and certainly

in this case we can see that it has the

use of 786 as a resistance level on

several occasions now given the false

breakout on Friday that's rather telling

we also can view this as a false

breakout from a box here as well as you

can see the dollar cad seems to be

slinking upwards and has some time since

February we've seen the consolidation

and I breakout to the upside

consolidation break up to the outside

however just how likely is it to break

above the 786 well the factor matter is

we do have this Fibonacci level of

resistance but what is more is the fact

that we do have other clues which back a

potential prognosis for us so if we take

a look at this as one big a/b c/d pen we

can see that it is actually rejecting

thee we hopefully that works there we go

there we can see it's rejecting just

shard 1.2 72 but

aligns very nicely with the eight eight

six Fibonacci retracement level however

if we do look at this a b c d pan we can

see that it does potential a line with a

Fibonacci extension one point two seven

two there we go the tip of Friday's

bearish pinbar reversal so that's one

however as he probably noticed by now we

do have several ABCD patterns here we

have the major one a b c d we have a

smaller one which we've just done a b c

d and now we've got a b c d with inside

the smaller ABCD pan so you've got three

ABCD pans to really be paying attention

to and this is all about building up the

evidence for our sell trade idea with

the US dollar versus the Canadian dollar

simply take point a b c d we take it

from d to point a we can see that we are

rejecting just shy of there we go the

one point two seven two so we do have at

least one ABCD back completing at point

D which is the one point two seven teeth

of an object's tension level okay so but

we do have the false breakout from a box

that's one factor we have the 786

Fibonacci retracement as a level of

resistance and we do have the completion

point of an a/b c/d formation okay but

what is more let's take a closer look

for those of you who do trade the

advanced bearish pinbar reversal

strategy you know all too well that if

we get a bearish pinbar reversal on the

daily or indeed the weekly timeframe

that we do look for what we call time

friend correlation and if we get a

reversal on a smaller time frame then

that is excellent so looking at this

here the loonie

on the hour we can see that we do have a

very nice head and shoulders formation

you've probably already guessed it left

hand shoulder head right hand shoulder

what is telling here is the fact that

today we have printed a much lower right

hand shot which is another bearish clue

in favor of weakness in the US dollar

certainly

case against the Canadian dollar here

okay so that is a couple of clues in

favor of us so but do we have anything

more well let's find out we look for

bearish reversal divergence as well with

these stochastic setting 833 see if we

look here from the hi printed in late

April compared to the high printed on

the 31st of May more recently and

compare that with this lower high

printed on the stochastic setting 833 we

can see that we do have witnessed

creeping in and this really does tell us

that the Bulls are losing in their

strength in the age-old battle between

bars a seller certainly in this market

okay so we do have a number of factors

on our favor here not only do we have a

bearish pinbar reversal closing on

Friday supported with a bearish

head-and-shoulders pan on the hourly

time frame we've also got bearish

reversal divergence we've got an ABCD

pattern completion and the fifth reason

the rejection of the 786 day Bonacci

retracement level that's pretty good for

us out certainly in my humble opinion so

how not are we gonna trade this we've

talked about it a lot how we're gonna

try that more simply what we're gonna do

is place an order to sell just below the

low here stop-loss above the high if

we're triggered into the trade then what

we'll do is we'll buy back half the

position if as and when we get to a

one-to-one I what we've gained in profit

equals what we've risked their case so

we'll buy back half the position to

ensure a free trade and then what we'll

do is let's just draw this on probably

just to give you a visual representation

there we go though ideal but it's a

fiddly old shot this very very busy

I know I've always said simplicity as

kiba's I mean when we're looking for

these clues and this extra evidence when

we've got everything on the charts on

has it can look like a busy all the same

okay so when we get roughly roundabout

here obviously nothing is ever

guaranteed we get a 1 to 1 then we'll

buy back

position that's right about here ideally

obviously nothing is ever guaranteed

like I mentioned we'll look for it to go

down even further take out this previous

swing low and enjoy alright

much further down and regarding this

retracement here's merely just a complex

retracement from February however after

the bigger the distance between our

entry price and our ultimate profit

target the lower the probability okay so

we always want to really cut target what

is reasonably achievable rather than

what we want to happen of course we all

want to make loads of money very quickly

in trading but unfortunately we need to

underpin our world of dreams and

fantasies with what is reasonably

attainable and achievable okay so

looking at the evidence like I've

mentioned before five reasons to sell

that dollar versus Canadian dollar US

dollar versus Canadian dollar story and

we look like it's a very high

probability once one at least will buy

that half the position and then if when

it takes out this previous low here how

about our second target okay well a

second time it we can be a little bit

more generous to be just down here for

example it falls back down to this

that'd be fantastic okay but of course

we'll talk between now and then catches

you