I just wrote a post about an ongoing EURUSD long trade and wanted to cover a question I had in the comments.
The reader wanted to know if the setups from previous weeks are forgotten about once a new week begins.
The answer is a resounding no.
I am just unable to spend that time carrying forward all the charts that still have potential from previous weeks. It is too time consuming and I would need to tweak the blog to make that possible.
In this post, I want to look at a current short I am holding in the USDCAD.
Let’s take a look at a USDCAD chart I posted a few ago
I had posted for the week Sun Jan 7 – Fri Jan 12 that we needed to see some type of counter movement to position for another short trade.
We eventually got the pullback and price started to move down. The recap for the week said there was 70 pips up for grabs in the short that happened.
But the move was not done.
The next week, I saw price action on the lower time frame still bearish and I entered another short on Jan 15 2018.
Price began to consolidate but nothing in the price action was showing bull strength so I held on. Let’s go through this chart and full disclosure – I’ve already scaled at 1R and tightened the stop loss.
This is a great lesson on stop placement. This line was the spot of the original protective stop loss that was placed. It was, I believe, 1.5 ATR from entry. Why is this critical? You can see the spike in the middle of the range that would have stopped many Forex traders out. Why? FX traders usually keep tight stops due to poor capitalization. I keep my stops away from noise.
This is the four hour chart and was the reason for the new entry. Price had broken from a range with momentum. After some lower volatility and a brief four hour candlestick with bull intent, we were back to the downside. My entry was actually a sell stop at the open price of the previous candlestick.
As with all trades, I won’t tolerate strong adverse action against my trades. As a swing trader, I don’t want to give back much of the position. When I play for longer term trades, I will tolerate adverse price action until I notice a viable trade in that direction. I will then exit the first position.
Charts Can Be Viewed Every Week
I would suggest that all charts that are posted that have not gone through some major price movements, stay on your watch list.
Watch how price develops and if a setup once again sets up, you will be in a position to possibly take a position.
Don’t forget stop loss placement. I feel there is a lot of random noise in markets and keeping a stop loss in that range of that noise, is deadly. My stops are in a position where there has to be deliberate price movement to be hit.
I hope you’ve enjoyed these last 2 posts regarding current trades. I keep quiet about my positions but both the EURUSD and USDCAD were a teaching moment that I could not pass up!