I often see much debate about how to use trend lines among traders. You hear a lot of people with very strict rules for drawing trend lines, however price action is powered by human interaction with the market and just as humans are not perfect the market is not perfect either. Despite how and where the trend line is drawn on the USDCAD it is unarguable that buyers come into the market every time price actions come around the area marked off by the two trend lines and the green diagonal horizontal drawn on my chart. As this morning's data caused a decent sell of on this pair and price action approached this trend line zone buyers swooped into the market to try to respect it. Throughout the day price action will give us confirmation if it wants to respect this trend line zone and potentially swing up to at least previous structure highs, but potentially even higher forming a new structure high as up-trending markets usually do.
Please note the following rules below for entry: The trend line zone holding as support Continued momentum to the upside Enter on bullish momentum breaking out above the 1.32600 level Profit whatever you can get, but the previous structure high marked off by the red rectangle could be a good target Stops at around 1.31700
This trade will lose its potential if first rule becomes no longer applicable. For example if more bearish momentum enters into the market and we see price action move substantially below the trending zone.
You will find that my style of trading often holds a greater risk than reward, however the potential of price action moving in the favor of my position where profit can be liquidated and banked before price action moves against me is very high when the rules are followed.
If you find yourself liking my style of trading please feel free to follow me as I will post potential trades like this rather frequently.
Would you also post when you actually enter so I can see what you mean? Thanks!
UnknownUnicorn261897
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I will post a private entry post and link it here if I get an entry signal. Will not be looking for an entry until the start of next week I am sitting in cash for the rest of the day. Very possible this trade can lose its potential throughout the day, but I will keep my eye on it.
timwest
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I like how you are suggesting to buy on some strength to make sure you aren't buying into an abyss here. But could you clarify what you mean by "Enter on bullish momentum breaking out above the 1.32600 level "? Is there a specific momentum indicator you are following or using?
UnknownUnicorn261897
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I don't have a momentum indicator, I use a strategy that consists of current price action and a few ema's to confirm momentum. I trade during peak trading hours, for me this is 7 am - 11 am and 7 pm - 11 pm est so what I will be looking for, likely next week, is bullish momentum pushing price action to the upside. I will likely hop onto a slight pull back after some resistance is taken out and the market has confirmed it wants to move upwards. Of course this is just an idea and could lose its potential throughout the rest of the trading day.