The Dollar Canadian pair is a volatile one. It tends to flow with the price of energy and metals (Canada's greatest source of wealth - other than its national pride and hockey prowess!). The pair has been trading in a slightly downward channel for the last few weeks and I expect it will break out at some point in the near future. I've drawn my "sell line" between 1.2075 (the low of the 1200 EST 1 hour bar on 12/24/08) and 1.2043 (the low of the 1500 EST 1 hour bar on 01/04/09). If the price closes below that bar on the 1 hour time frame I will sell. My profit target is 1.1820, but as is my way, I will move to break even at +50 pips and will lock some profit in if it keeps moving toward my target. On the long side, I've drawn my "buy line" between 1.2400 (the high of the 0400 EST 1 hour bar on 12/19/08) and 1.2342 (the high of the 1000 EST 1 hour bar on 12/31/08). Same basic idea, I'll buy if the 1 hour bar closes above this line. On the long side I have two profit targets. I'll sell half my position if the price gets to 1.2500 and the second half if it gets to 1.2600. As in the short side, I'll move to break even if I get to +50 pips and start locking in profit sometime thereafter. As for stop loss, I will get out if the price moves back and closes below the entry line at least 30 pips. I'll let you know how this works out.
Happy Trading!
Happy Trading!
