Update on the USDCAD (+ others) and few thoughts about Swing Trading

Swing Trading

Last week I made a multiple time frame analysis on the USDCAD. All charts were pointing up and I thought it was a good idea to look for long opportunities.

Guess what? Since then, the USDCAD has been going up :)

Last week I got a few emails asking me if I’d close my trade over the weekend and last Fridays CAD news announcements (I think it was the CPI)…

My answer was no. I’ve talked about it in the last few weeks, how I’m going to handle news announcements this year. In essence its like this:

I’ve noticed that when there is an important fundamental announcement, most of the time the market will move in the direction of the market condition. I always trade in the direction of the market condition, so if I have enough pips to set my SL to the break even level, I’ll always let my trades run, even during the most important ones.

Now, this doesn’t mean that the market will always move in the direction of the market condition. Sometimes the market will move agains it, specially if the actual figure is way off the expected figure.

But that is a risk I’m willing to take. I took this decision after analyzing the market reaction to important announcements when I closed my trades during 2012.

What do you think about this? Are you with me or would you rather close all your trades?

Swing Trading

Now, I think this is the way to go for Swing Traders, if you want to capture most of all those swings you’ll have to learn to hold your trades during important announcements and over the weekends.

I know it’s difficult to hold your trades. Specially when the market has moved on your favor, there is a natural tendency to “want” to close your trade and grab those pips already on your pocket.

We feel like those pips are already ours. Why would we let the market take them away from us?

But we need to learn to be patient fellow trader.

Otherwise it will be impossible to capture all those market swings.

If you cant, try closing your charts, doing something else, close your trading platform, etc.

We need to be patient to wait for our signal to trigger, but most importantly to wait for the market hit our take profit order.

If you find it difficult to do, try doing some trade management, reducing your risk (i.e. taking partial profits), or trailing your stop loss, etc and give your trade the opportunity to hit your order.

If on the other hand you are a short term trader, without a doubt you need to close your trades, without a question. Alright?

Ok, now to the USDCAD

USDCAD Update

The USDCAD is still in a bullish condition, and I can confirm this by looking at the long term chart, in this case the weekly chart:

usdcad1w2

Still clear isn’t it?

So I think it will continue its way up until it reaches the next LT resistance level which is at 1.0450.

¿Agree with me?

GBPUSD Update

Two weeks ago I also analyzed the GBPUSD and thought it was in a clear bearish condition, and the GBPUSD fell like a rock…

And let me tell you, I was surprised to see the GBPUSD break the bottom of the range that fast:

GBPUSD weekly chart

And now that the GBPUSD is trading below that level, it has plenty of room to continue falling, at least until it reaches the next LT support level which is at 1.4383.

Now, take in consideration it is currently trading at 1.5350, so it has a long way to go before it reaches its long term support level (more than 700 pips).

Here is how the hourly chart looks like:

GBPUSD Hourly chart

It would make sense to wait for the market to break the short term support level (1.5088) to start with your trades.

If you try this trade, let me know you did it ok?

USDJPY Analysis

The USDJPY traded in between The SF Box for about two weeks, but yesterday it broke through the lower extreme level:

Here is how it looks like:

USDJPY Hourly Chart

As long as the USDJPY keeps trading below the short term resistance level (green level at 92.22) I’ll be looking for short opportunities.

All take profit orders should be placed just above the next LT resistance which is at 89.00. The USDJPY is currently trading at 91.62, so we have plenty of room to plan and take our trade.

Your turn

Do you close your trades before important announcements? What do you think about my approach to handle news announcements?

What about the USDCAD or the GBPUSD? Do you plan to trade them? What about the USDJPY?

What other currency pairs are you monitoring?

Tags: , , ,


Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • ON the USDCAD I DO THINK YOU ARE CORRECT FOR TARGET 1.0450 WHEN IT HITS THERE I DO THINK YOU ARE GOING TO HAVE A RETRACEMENT BACK TO 1.OO280 OR CONNECT TRENDLINE FROM BOTTOM ON WEEKLY CHART AND ITS GOING TO STAY BULLISH GOING BACK UP OVER 1.0450 TO 1.060 AND RETRACE BACK TO 1.0450 AREA THEN BACK UP PASSING 1.060 AND STAYING BULLISH I’M HOPING FOR ELLIOTT WAVE POSSIBLY UP TO 1.1120.I ALSO AM GOING TO EXIT AT 1.0450 AND REENTER WHEN IT GETS BULLISH AGAIN.IT DOES LOOK TO ME THOUGH THAT IT IS GOING TO COME BACK AND TOUCH WEEKLY TRENDLINE AND HAVE A WAVE UP. 

    • Raul Lopez

      Hey Ronald, thanks for your comment. 

      Good luck to us then! 

      I think that once it hits the resistance level at 1.045, we’ll need to wait and see what happens there. If it gets rejected, I favor a retracement back to the 0.9798 area… And I’ll try to trade the range… 

      What do you think?

  • caswell Les

    i mostly close early and take profit way earlier than i should have waited for. EUR/USD rocks this week

    • Raul Lopez

      Hey Caswell, 

      I know, it’s always difficult to hold your winning trades. 

      But keep something in mind, if close our trades that are on green too early, we are cutting our average winning trade. 

      And what happens when the market goes against us? We keep holding until it turns around right? 

      If we keep doing this sooner or later our average losing trade will be larger than our average winning trade. 

      What do you think?

      • caswell Les

        You are correct, I am actually outgrowing that behavior but it’s gonna take time