Paper trade: 50% long USD/CAD @ 1.06754
As I’ve said before, I’ve been observing the forex market hoping to dabble in it later on once I’m confident of my strategy. Here’s a first paper trade in the forex market. I went through the charts of some favourite pairs and find that the USD/CAD offers a good reward/risk opportunity. From Figure 1, here’re my targets. The entry price timing is based on the 30 min. chart of Figure 2 but it doesn’t matter much for this paper trade as I’m testing the longer term strategy and not my entry/exit timing.
Entry: 1.06754
Other 50% Stop Entry: Break above 1.113
Stop: 1.0593
Target: 1.15
Reward / Risk = (1.113 – 1.06754) / (1.06754 – 1.0593) = 0.04546 / 0.00824 = 5.5 > 5
As this is a trade based on the daily chart. So it should take a few weeks to know which way this will go.
Also notice that I’m not entering a full position on entry as I’ve usually done. I’m going to try a 50/50 entries/exits method to minimize my risk. A benefit of forex is that there’s no commission (brokers make money with the spread), so there’s no up-front penalty for me to break up my trades to multiple entries/exits.
USD/CAD daily chart
USD/CAD 30 min. chart
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