EUR/CAD Signal – Update

Posted on 01. Jul, 2010 by Jakob in Uncategorized

I have recived a couple of emails from my readers, asking me if I was going to write a blog post about my signal which was send out to all my readers, on EUR/CAD. Let´s take a look at the details. First of all, I have pasted my email about the signal in below:

Good morning guys,

We have a pretty good setup on EUR/CAD. This pair is trading in a bearish channel on the daily and weekly timeframe. We are very close to the top of the channel, and there are two ways we can play this. I am personally going short from now, just around 1.2870. This is also because we broke a short-term bullish channel.

My stop will be place just above the recent high at 1.2920 which gives us a stop loss of some 50 pips. This is outside of the channel and above recent high so this should give us a good chance to avoid hitting out stop loss.

Take 50% profit when we hit 50 pips profit and use a trailing stop for the last 50%. Keep the trailing stop about 30 to 40 pips away from the price. Risk no more than 1% to 2% on the trade.

The other way to trade this is to wait and see if we break the channel and get a close of the 4-hour candle above the trend line, and then go long. However, my bias is short for the moment.

If you have any questions about this trade, feel free to send me an email at any time:

tradeprofits@tradeprofits.net
Let me know how things work out.

Best regards,
Jakob
www.tradeprofits.net

Now take a look at the picture below.

This is a daily chart of EUR/CAD. The two yellow lines shows the channel which I am referring to. When the email was send out, the pair was just around 1.2870, hence close to the top of the channel, which is primarily the reason why I was looking to sell the pair.

In addition to this, the pair had just broken the downside of a short term channel on the 1-hour chart (see the picture below), which I figured was a good confirmation for me to enter on a short trade.

As mentioned in the email, stop loss should be placed above recent high and outside of the daily channel, which was at 1.2920 giving us a stop loss of 50 pips. Shortly after entry, 1.2820 was hit, and I recommended taking partial profits. What I didn’t mention in the email was that you could (and probably should) have moved stop loss to break even at 50 pips profit. Anyhow, after the 50 pips of profit was hit, the pair turned on us, and we got stopped out. Now if you took partial profits, you would be out of this trade at break even, which would be worst case scenario if you followed the recommendation. Not the best trade in the world, and I expected more from it, but nonetheless, the signal had some potential, and hopefully none of you incurred a loss. Let me know.

Related posts:

1. Trade update and more trades
2. Update on yesterday’s trade and new entry
3. Forex Signal # 1 – Update
4. FxBossTrading – 3. update
5. FxBossTrading – 2. Update