[B]Student’s Question:[/B]
Sell USD/CAD 1.2444…make sense?
Power Course Instructor’s Response:
In a move to the downside, a trader would draw the Fib line from the Swing high to the Swing low and then look for a retracement to occur to one of the Fib levels. In the case on your chart, price action wicked above the 61.8% level twice…we like to see two tests of a Fib level if possible. When that second candle that wicked above the 61.8% level without closing above it closes, a short position can be taken at the open of the next candle.
So, when we take our short position, the stop would go above the highest wick penetration of that level…see the chart below for a visual.
