Long the Aud/Usd still and short the Usd/Cad
Last night I placed and entry sell order at 1.1740 for the Usd/Cad based on my analysis of wanting this the pair to break through 1.1740, this triggered about 9am eastern this morning. My stop was originally set at 1.1805, about 25 pips higher than the high of today and right at the 50% Fibonacci from yesterdays drop. There is a support level at 1.1685, if the pair bounces of this level again, I will take my profits. If the pair breaks through and goes further down, I am targeting 1.1600 for a limit. From entry I have a 140 reward/65 risk, or about 2 to 1 ratio. Based on the move this morning, I feel comfortable moving my stop down to 1.1770, about 30 pips higher than yesterdays low and above the 62% Fibonacci from today’s move by about 20 pips as well. With the adjustment of my stop loss, I am at a 4 to 1 risk to reward.
Based on the two trades from the beginning of this blog, the Aud/Usd is up 25 pips and the Usd/Cad is up 30 pips. Remember these are correlated pairs and should act similarly in an inverse fashion. If commodity prices strengthen or the dollar weakens, both trades should improve. I like to split the trades between the two pairs to diversify rather than playing 3% of my account in one pair, I can split the trade across two pairs.
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