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.

[caption id="attachment_1790" align="aligncenter" width="500" caption="USD/CAD daily chart"][USD/CAD][][/caption]

[caption id="attachment_1791" align="aligncenter" width="500" caption="USD/CAD 30 min. chart"][USD/CAD 30 min. chart][][/caption]

[USD/CAD]: http://traderpau.files.wordpress.com/2009/09/2009-09-18-usdcad_prop.png [USD/CAD 30 min. chart]: http://traderpau.files.wordpress.com/2009/09/2009-09-18-usdcad_30m_prop.png