Direct from the desk of Dane Williams.
With renewed USD weakness sweeping the market, there's no doubting who's been in charge of USD/CAD over the last couple of weeks.
Just take a look at the Loonie daily chart below.
USD/CAD Daily:
That's right, bearish as fuck.
But do you remember the last time we spoke about USD/CAD when price was at that last daily support/resistance zone. After a clean breakout and retest of previous daily support as resistance, USD/CAD had been continuing lower and the market gave us a perfect short entry.
Now that price has come down to the next daily support/resistance zone, I wanted to show how one trade with a tight stop loss can easily turn into a 10 bagger if you can optimise your entry and ride the momentum. Click the link in the paragtaph above to see the original entry (also quoted below), and then check out the updated Loonie hourly chart below.
USD/CAD Hourly:
I marked the zone I did because it was after price had failed to make an intraday higher high, and then retested short term support as resistance.
USD/CAD Hourly:
You can see that after breaking higher time frame support, price had failed to make an intraday higher high and then retested short term support as resistance. Just what we look for in order to get short so we took it.
With a stop just above the intraday zone, look at the risk:reward possibilities that could have been achieved here. Yep, that's x10 units of risk in profit on a single trade.
With price now at the next higher time frame support/resistance zone, its time to consider closing out and taking profit after successfully riding momentum between zones.
Can you see the benefits of switching from a short term retail trader's mindset of focusing on a high win rate, and instead putting yourself in a position to take advantage of big moves by letting your winners run?
This is the key to long term success as a forex trader.
Best of probabilities to you,
Dane.
FOREX BROKR | Hive Blog
Higher time frame market analysis.