UPDATE #1: Hello everyone, Trade is ACTIVE now. Remember I will be closing this trade at 1:30 pm (NEW YORK TIME) today, if we don't get stopped out here !!
Here we've a BULLISH on FX:USDCAD that is close to the completion point. The important point to keep in mind is that, the market has broken the structure by forming the 1st LL. This is the first signal of a POTENTIAL shift from the current BULLISH to BEARISH trend. We also have ratio confluence between 127.2% extension level of XA leg and the 161.8% extension level of AB leg. The stop loss goes 10 to 20 pips below the 138.2% extension level of XA leg. Also note that we have a at the completion point of this pattern. I will only be interested in SELLING this pair once we get a BREAK and CLOSE below that . USDCAD is at a MONTHLY and any signs of reversal from price action to the downside could present us with good SELLING opportunities. See the chart below for MONTHLY resistance.
As you know, I posted an idea of going LONG on AUDUSD but the pattern never completed and the market just took off from there. So in order to prevent this from happening again, I've decided that I will be adding 10 pips to every entry price for every trade that I will be taking from now on. Yes, you can argue that by taking this action, I will be breaking my rules for trading BUT these types of situations occur quite rarely. So this is the ONLY minor change that I will be making to my trading rules.
Since the completion point for this pattern is at 1.29018, I will add 10 pips to this and my NEW entry price will be at 1.29118. I believe the market has already came to this entry price and reacted from it, BUT I will still keep my pending order in place. I actually recognized this pattern AFTER the market had reacted from the NEW entry price. So as of right now my entry has NOT been triggered yet.
NOTE: As you all know we have the BIGGEST news coming up tomorrow which is the Federal Funds Rate from US. I advice everyone to be CAUTIOUS if you are going to take this trade. Tomorrow's news can either invalidate this setup OR it can move in our favor OR it may not do anything (which is highly unlikely). If my entry is triggered overnight, then I will stay in this trade up to 1:30 pm, just half an hour EARLIER from the Federal Funds Rate news release.
CORRECTION: I misspelled the 2nd target as "TG #1: +123 Pips", it should read "TG #2: +123 Pips".
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Good Luck :)