USD/CAD BUY TRADE REVIEW (OCTOBER 20TH 2022)
Analysis
Price makes two days of sideways moves, coming into the 20th of October 2022. If you follow our content, you know that the price moving in any direction less than 90% of the ADR (average daily range) is a sideways move. Also, two consecutive days of sideways moves leave us with trading an open bias.
In an open bias, we accept taking trades to both sides of the price. This means that we can take both long and short positions within specific trade parameters. The reason behind this logic is to leave ourselves the opportunity to catch a potential range border, as the price is less likely to break large ranges within sideways moves. So we try to take advantage of this by trading the upper and lower bounds of the range.
Trade
Here we pick the upper level at 1.3961, which is the daily high of the 13th of October 2022, and our 1st lower level, which is the level for this trade at 1.3662. The daily low for the 18th of October 2022.
Price gets to level 1.3662 during the New York session, then makes a valid stop run and confirmation within 2 candles. The confirmation candle closed 35 pips from the low, so we took the entry at 30 pips from the low of the candle count formation for a 35-pip stop loss. The entry executes on the 3rd candle in the count, activating the trade.
Trade management
After price triggers, stop loss and take profit are set to 35 and 70 pips respectively. So the only thing to do is wait for the point of breakeven to hit.
We usually advise a set-and-forget style of management for beginner traders. Here you set an alarm at your breakeven point and move the stop-loss the second your alarm is set off. In this trade, the price moves straight to our breakeven point (This point is 60% of the full take profit price). At this point, you move your stop loss to breakeven, and all that is left is to sit on your hands and watch the price move either to hit full profits or breakeven.
Here we hit full take profits, as you can see below;
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-Kevin