USD/CAD Range Trading Set Up

21 Eki 2017

USD/CAD is trading in a short term D1 range from 1.24394 to 1.26000. Trading options are straightforward, sell at the top of range and buy at the bottom of the range at any failed breakouts.

Be wary of breakouts in either direction when trading the range, keep your stops low risk and watch carefully for fundamental factors that may spur a breakout in either direction.

My Trading Rules - How I identify trades, define my edge and manage the commercials:

First I define my 'edge' which simply means a set of circumstances that indicate one eventuality is greater than another.

My Edge: (How I decide on if I should enter)

1) Is defined as trading in the direction of the overriding daily trend (Bullish, Bearish or Neutral)
2) In a trending marketing I look for entries at corrective price structure
3) In a neutral market I trade the upper and lower most extremes of the support and resistance levels
4) In the case of a breakout I seek an entry in the direction of the break

Next I follow 4 rules for undertaking analysis: (How I spot opportunities)

1) Analysis must clearly define a 'bias' and the parameters for invalidating 'bias'
2) Analysis must clearly provide a trade set-up with entry, take profit and stop loss
3) Analysis must debunk a trade in the opposite direction
4) Analysis must factor in sentiment and fundamental factors

So now I know my edge and how to spot opportunities the next is how to manage trades: (How I decide on the commercials of a trade)

1) Take profit should be set at a key fibonacci and/or price structure level
2) Stop loss should be no more than 3% per trade (sum of total positions)
3) Entry should feature 2 or more positions
4) Entry at market is forbidden to mitigate impulse trading (I only trade via orders)