Hey BP community. I’m a newbie who’s just started on this journey of trading. I’ll use this space to discuss my trade ideas and I welcome any and all feedback. I normally demo trade EURUSD, but as that pair was been a bit boring, I’ll look to broaden my horizons. Off we go!
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Hi @mtb_rex
Wishing you success with your journey. If i can think of anything sensible to contribute along the way then i will chip in - can’t promise that it will be anything useful though! 
Excellent! Thanks for the well wishes. I’m sure you’ll be able to share some knowledge on things GBP and EUR-related. Looking forward to it!
I was trying to find a trade on EURUSD, as I’ve mainly been following that for a few weeks, and placing some winning (and losing) trades. But I didn’t see anything I had confidence with, so I figured, why not check out some of the other majors. I started with GBPUSD. Given Brexit, and what could or couldn’t happen this week, perhaps that was a bad one to start with.
I did draw up a chart, but I was getting mixed signals.
Price was below the 200 and 50 MA, bouncing around in a symmetrical triangle, lower highs and higher lows, but over down. Perhaps there’s a trade here if I waited another day, which I might still do.
The hourly was also showing some indecision, which wasn’t helping me. Again, maybe more a situation where I just need to be patient.
So I’ll keep an eye on this over the next day or two and see where the action takes me.
On to USDCAD, something I don’t follow at all. But I took a look at the chart anyway to see if anything jumped out. And what did I find? A descending channel, with price right at the downward trendline, just asking for a trade.
Here’s the wide look.
And a bit tighter view
I haven’t placed the trade just yet, as I’m waiting for price to close a bit lower than my trendline. But with a stop of around 65 pips (up to the last higher high) and the potential for price to move down into the green zone, I think my risk to reward is on point.
Give me your thoughts if you find this interesting. Am I on the right track?
Your technical knowledge can be seen and I can see that you put emphasis on trend line reading.
If anything try put some fundamental & sentiment analysis into your trading decisions. Also, add a trading criteria for each time you enter a trade, ticking the boxes.
My personal opinion is that the US is seen as a strong economy now overall against other countries since it has demonstrated the ability to negotiate themselves out of original trade agreements, hence with the USDCAD, you will be betting against the trend IMO fundamentally wise, technically wise, no.
Thanks for the tip. Yea, I’ve been reading up on news and market commentary but want to first focus on the technicals. The fundamentals definitely add to the equation, and I know with my brain, I’d get into some deep analysis paralysis. I definitely need work on my sentiment analysis.
And your trading criteria suggestion is a great tip. Check the boxes. Got it. Mind sharing what boxes you go over when setting up for a trade?
Thanks!
This is not one of my regular pairs either but I took a look at it.
I agree with your down-sloping channel but I also see another trendline that could have already been broken to the upside. So I very much agree that it is worth waiting for a while and keep an eye on the shorter TFs for a clue when/if it is breaking lower. This is what I see here:
On the Daily:
Yes, there is a longer down channel, but there is also a nearer term downtrend line that could be interpreted as having been broken to the upside - the red dot/dash line here. Also we are above the 200 SMA and the RSI is still positive:
If we then look at the 4H chart then we see that we not only broke above that nearer down trendline but we also came back and tested it and bounced up again (see blue arrow). Even on the 4H we are above the 4H 200SMa and RSI is positive here, too. But we can also see here clearly on the 4H that we have already tested this channel line on the 4H three times and so far it has held!!!
So, I think you are right that this channel could well be a strong resistance that could well result in a reversal, but it is worth waiting to see the bounce well-established first before pre-empting this even if it means missing some of the initial pips (or look for a retest of that channel line for entry). IF the market breaks up through this channel top then it will go far and fast!!
PS what do you use your 50/200 MAs for? Are these just trend identifiers or also signal producers? As trend condition identifiers they are showing a flattening off here but not quite a reversal yet?
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Manxx, you rock! Thanks for the feedback and then your own interpretation. This is what makes the forum so awesome!
The MAs mentioned are used mainly for trend identifiers, but also trying to work them in to see how well they do as support and resistance levels. The trend is my friend, and I want to make sure I’m trading with it, so the more supporting material I can provide myself, the better I feel or would feel pulling the trigger.
And thanks for your thoughts on the secondary downtrend line. I didn’t even think to look at that.
This is another aspect I’m working on. Timing my entry, being patient, and looking for confirmation before diving.
Thanks!
Being patient is critically important. It is very difficult to resist prematurely entering a trade on what looks like it’s about to happen.
But there is another factor here that can also add pressure and that is this thread itself!!
It is a great thing to maintain a thread but it also pressurises one to try and regularly update it - which can sometimes lead to looking for something to trade just so’s there is something to post about - and not always meeting your trade quality criteria.
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Looking at your USDCAD channel again this morning, we have drifted off a little, perhaps enough to turn the < 1H charts negative (depending on one’s charts!) but nothing very dramatic yet. But we have reached a rather interesting level here that has been alternately support/resistance on many occasions for some time. Here it is on the Daily chart. I am tempted to think that if we break this with a clear close under it then that might suffice as justification that the channel is still valid? (remember that such lines on a daily chart are more like zones than any precise, specific price level.)… And most touches to this line seem to have resulted in either a strong bounce or breakthrough… interesting to see what happens here! 
Following on from the above, the market seems to have “noticed” this horizontal S/R line and has, at least temporarily, risen off it! You have identified a very interesting situation here, @mtb_rex! :D. We are sandwiched in a very tight area between the top of your channel and this horizontal line. I rarely look at this pair but I kind of fancy a trade on this once it closes on one side or the other of this bounded area…….
I am not trying to suggest anything here - just talking about some ways to study these kinds of situations. This is my usual procedure:
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Look at the PA type situation on several TFs as with the above and decide what it looks like.
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Then overlay my technical setup as a kind of skin over the chart to see whether it is in confluence with the PA view. At least on my platform I can toggle the entire indicator setup on/off.
If I toggle it back over the above 4H chart then I get a picture that shows we are still biased towards the upside following that compression of MAs and the positive RSI, but without conviction. We are also hovering around yesterday’s Pivot which is something else I keep an eye on. So unless it can take out those recent highs and the top of your channel then I am still sidelined with an expectancy towards a collapse here. But patience, stalking the market, waiting for the signal…………
Edit: Note that, according to my calendar, there is the Bank of Canada Monetary Policy Report and interest rate decision later today - which may well provide the required impetus one way or another…
Well that was quite a reaction on USDCAD! One had to be quick to get in on that move!
We had a interesting bottoming out here that has formed, believe it or not, an up- trendline on the daily chart and a coincident bounce off that 4H 200 SMA! But I wouldn’t take that too seriously yet - its just an observation!..
But I think I have posted already too much here so I’ll back out for a while…
An excellent breakdown of your thought process, Manxx! And not at all on the posting. I was looking at a USDJPY trade, while USDCAD trade was moving, and just now got a chance to look back!
What a move! Almost 100 pips in 15 min. Price moved back up 40 pips, and then down another 70! Well that will teach me to keep an eye on my other potential setups!
There’s definitely still room to move further down. I’ll be keeping a close look on this one! This is a great teachable lesson to me, in that my focus on USDJPY, for the shorter timeframe, was working on a potential range of only 50 pips, whereas USDCAD had the potential for a bigger move. I lost my way, broke discipline by getting sucked into smaller time frames looking for pips.
Definitely not what I was expecting on USDCAD, but still exciting to see some of my thoughts and definitely your observations holding true!
Thanks Manxx!
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It would be easy to say in hindsight that it would have been best just to have taken a short position earlier and caught this move! But that would have been news trading - which is ok but is its own game with its own rules! It could have just as easily gone the other way and, even with a stop, suffered some negative slippage on such a fast move.
At the end of the day, the ultimate objective is capital preservation and growth. So although maybe we missed a big move here in this case, a missed move is more valuable than a hefty loss… There is always another move, that much is certain in forex!
One thing we can say we learnt from today is that even pure technicians should watch the calendars for important events because they affect both (lack of) movement prior to the release and the immediate aftermath.
Thanks for sharing this little journey! 
That’s a great point. It’s easy to imagine the scenario where everything goes exactly how you think it will. It’s very much harder to take the other side and ask yourself what if everything goes in the exact opposite direction. What are my invalidation points?
Absolutely!
Look at this… I’m learning!
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Just out of interest, in this case where we had two very clear, strong and close boundaries we could have considered a “news trade” and placed a limit buy order, say, about 20 pips above the channel top and a limit sell order about 20 pips under the support line. Then whichever way it went after the news event we would have won except in the situation where it initially goes off in one direction and then turns and goes in the other, locking in the difference between the two prices as a loss (it happens!). 
Are you much of a news trader? With the moves happening so fast, you’d have to be watching the action happening right then and there I think.
Hi Manxx,
Just a question, if price breakout of this channel, breakout by how many pips do you consider it to be a valid breakout signal? breakout by 5pips or 10pips ? Or how do you judge if it is a valid signal.
Chiming in…maybe the close of the next candle, on whatever TF you’re on perhaps? Obviously on something like the daily, that might take too long for your liking. Also interested to see what Manxx thinks.
Not really my thing. In earlier years, when there was usually more follow-through after such an event, I would watch and wait and jump in immediately once the initial chaos had settled. But nowadays, just like yesterday’s USDCAD, there is often just one big candle and then it stops. We did not even take out the low from the first big down move. One point about exceptionally big candles that very often happens is that there is a pull-back to about 50% of the initial move. That happened on USDCAD yesterday. If one is looking to get in on such a move then that is a region that often offers a good entry point.
I am not going to go on about that USDCAD move much more (it is not even a pair that I trade regularly ) but it has some really intriguing issues. It was a relatively big and fast drop but we ended up with a bullish pin on the daily chart! We also bounced off that 4H SMA 200 and simultaneously formed a new uptrend line (not one that I would rely on yet though!)
But I took a look at the weekly chart, too and, well, what do you make of it:
4-Hour chart:
Daily chart:
Weekly chart:
I really would not like to place a bet which way we go from here!