On July 7 2020 I posted on social media Stocktwits/Twitter @AidanFX “USDCAD I will continue looking for SELLS as long price stays below 1.3624. It’s entering the area where can possibly turn lower.“
The chart below was posted on social media StockTwits/Twitter @AidanFX July 8 2020 showing that a bearish market pattern (blue) formed signalling sellers that the pair would move lower from the XA 1.618% Fib. retracement level. A bearish divergence pattern (pink) also formed and was clearly visible which was the second signal to sellers that USDCAD would move lower. Bearish blue and pink market patterns terminated at the light blue support/resistance level and reversed lower which offered the third signal to sellers that the pair would continue lower. Fourth bearish signal was when the momentum indicator crossed below the low of the bearish divergence pattern black trend line which then confirmed the SELL entry (light blue oval). I called for traders to SELL USDCAD and only a move above the point D of the blue bearish pattern would invalidate the SELL trade setup. Stop loss was set above the blue point D high targeting the green 1:2 RR and 1:3 RR targets. USDCAD hit and broke below the 1:3 RR target at 1.3508 from the 1.3598 sell entry for a +100 pip move. If you followed me on Twitter/Stocktwits @AidanFX you too could have caught the USDCAD move lower.
USDCAD 30 Minute Chart July 8 2020
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on Twitter for updates and questions> @AidanFX or chat me on Skype > EWF Aidan Chan
Always use proper risk/money management according to your account size
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