Paper trade: Long CADJPY @ 86.88, Stop 86.10, Target 88.0

I entered CADJPY long at market for 86.88 just now. This is a continuation of my previous USDCAD short position. However, USDJPY is on a run upward so I'm switching to go long on the loonie with yen instead. Figure 1 shows the daily chart of CADJPY. Notice the imminent MACD bullish crossover and the already in-play stochastic upturn. I like it. My stop loss level is set at 86.10. It's the high of a previous peak on February 3, two weeks ago. My target is the round number 88 resistance. 88.0 has been an important price level for CADJPY for the past few months. So I'm setting my sight there.

[caption id="" align="aligncenter" width="570" caption="CADJPY, daily"][][][/caption]

Figure 2 shows my timing for this entry. CADJPY is noticeably meeting some resistance at 87.50. 87.50 is also the 61.8% Fibonacci level of a recent down move. This is a cause for concern on my long position as we could very well retrace here. However, the bullishness of CADJPY is apparent in Figure 2. Prices have consistently been bought for the past few days right on the short term moving average (teal line). Furthermore, the intermediate term moving average (orange line) is about to cross the long term moving average (red line) as I enter this position.

Lastly, gold price has taken a dive from 1130 to 1100. Meanwhile, crude oil price is holding the 77 support nicely. Thus, this confirm my previous view that oil has better upside than gold in the intermediate term. Which is why I've been trading the loonie these past weeks.

For this particular CADJPY trade, I have another buy order waiting above current support level to add to my long position. Let's see if CADJPY can break decisively to the upside in the next 24 hours as US and Canadian data comes out.

[caption id="" align="aligncenter" width="570" caption="CADJPY, 4-hour"][]1[/caption]

Posted 17 February 2010 in forex.

Paper trade: Short USDCAD @ 1.0671, Stop 1.0756, Target 1.05761

Perhaps third times' the charm? I tried to short USDCAD twice last week already. Both times I've been stopped out for a total of -0.2% of account loss. My intermediate term analysis remains the same as before. So I won't repeat myself here. Entry signal for this particular short is shown in Figure 1. I'm just using the 4-hour chart as I have a well defined (recent top) stop this time. I compensate with a smaller position size to limit my risk to 0.1%. Reward / Risk = (1.05761 - 1.0671) / (1.0671 - 1.0756) = 1.11 [caption id="" align="aligncenter" width="570" caption="USD/CAD, 4-hour"][][][/caption]

Posted 09 February 2010 in forex.

Paper trade: Stopped out of USDCAD short @ 1.0640 for -67 pips, re-entering @ 1.0680

Well this was awful. USDCAD continued on a rampage upward and I was caught on the wrong side of the fence. Total loss for this was 0.12% of my account. At least I was light in it. In retrospect, I broke my own rule and didn't enter at one of the 4 fundamental entry points. However, after some bear rampage throughout the markets today (Bloomberg: [Stocks Plunge on Concern Rising Debt, Job Losses Threaten Global Recovery][]), USDCAD is at the top of my channel as shown in Figure 1 below. So while my previous entry was early. USDCAD at this price is a good short. I will take it slow this time by setting a limit order below current support on the 4-hour at 1.0680, with a stop at 1.0750. And then adding a second chunk at 1.0640, my stopped out price. As is customarily lately, I am only risking 0.1% of my account on the initial order. On a weekly chart, 1.0750 to 1.0810 is obviously a strong resistance for the USDCAD. It is a congestion zone in 2007 and 2008. Then USDCAD spent the last quarter of 2009 trying to break this resistance to no avail. But who knows, perhaps USDCAD has had enough and it will break this resistance decisively soon. That's why I'm only betting on this reversal with limited risk. It's just a matter of wait and see now.

[caption id="" align="aligncenter" width="570" caption="USDCAD, 4-hour"][][][/caption]

[Stocks Plunge on Concern Rising Debt, Job Losses Threaten Global Recovery]: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8ajRZqBemfs&pos=1

Posted 04 February 2010 in forex.

Paper trade: Short USD/CAD @ 1.0573, Stop 1.0640, Target 1.0415

Taking a first position in USD/CAD short here at 1.0573 on a 4-hour moving averages cross-over (Figure 1). I've also placed a limit order to add more at 1.0519 below Fibonacci support (shown in Figure 1). Reason for this trade is that USD/CAD is moving away from an upper bound channel with a overbought stochastic reading, as shown in the daily chart of Figure 2. I've also considered going long AUD/USD, but AUD/CAD trend remains bearish. So I chose to short USD/CAD instead. Secondly, crude oil (and gold too) looks to be bouncing off an oversold level with a rapid move in 2 days from 72.43 to 77.39. Coincidentally, INO.com posted an intermediate term cyclical analysis video with a bullish outlook (affiliate link). They put out a better case than I do. USD/CAD might make a short-term upward bounce here because of a short-term oversold condition. However, there's evidently a lack of buyers in the past few hours (Fig. 1). The price has been sitting on support a bit too long in my view. Thus, I'm expecting it to break without a meaningful retracement (hence the short entry). A confirmation would be a break below 1.0530. Thus I have a limit order to short more below that price. I am risking 0.1% of my account on this trade. As you may have noticed, these charts are from Metatrader. I'm switching over to the MT4 platform as of today. Having played with its charting features for the past few hours, I'm quite satisfied with it so far. Although my needs are low as I was fine with the Oanda platform too (arguably the most simplistic platform out there). [caption id="" align="aligncenter" width="570" caption="USD/CAD, 4-hour"][][][/caption] [caption id="" align="aligncenter" width="570" caption="USD/CAD, daily"][]1[/caption]

Posted 02 February 2010 in forex.

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