Despite all the talk of the Canadian economy in tatters as oil prices tumble, I focus on price and limit my risk.
Catastrophic events happen causing erratic behaviour in the markets. But all things being equal, the charts are telling me there is a good chance that USDCAD will fall from 1.51800.
Again, low risk, high potential reward is what I look for. I make sure I limit the things I can control. I cannot control oil prices, or Canadian economics. I control my trading account.
This is a nice area for a short position high up on the curve. Price is struggling to get through orders in a poor zone. This suggests that the buying power might not carry much strength going into 1.51800. The mass of sell orders might overwhelm buyers.
Entry: 1.51800 Stop: 1.53800 (200 pips, yikes! Trade carefully. Small positions and then build up) Reward: Straight away, I am looking at 1.40000 and then 1.34000 (so 200 pips isn't that much risk really)
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