USD / CAD - Are You a Believer?
Sorry, for my unscheduled hiatus from the usual posting…fear not, trading has been tremendous the past few weeks so life is good. I hope you’ve all fared just as well if not better. With that said, let’s talk shop…
Now if you believe the USD/CAD free fall from parity the past month is bound to continue then here is how I would play that angle:
As of this writing, we have a bounce on the Daily chart that sets us up for a potential entry to short. I’d now begin searching for any signs of weakness on a smaller timeframe (my favorite, 4-hour chart) indicating when sellers might be stepping back in. The danger with any trade like this is to be aware when sellers start running for the exits en masse…this is something we’d have to keep an eye out for on the Daily and use Stops based on key levels on the chart indicating when sellers may have lost faith shorting.
Right now, I’d sit patiently on the sideline waiting for signs of the bears beginning their assault on the bulls before putting my position on. I’ll post to follow up on this idea as it develops.