Sunday, July 02, 2006
Learn online forex trade - A great trade by me on USD/CAD..Although...
Learn Online Forex Trading - I placed a great trade on USD/CAD..Although I ...
Like I guessed in the last message, I was expecting the online forex trading market to wake up from the virtual sleep as FOMC rate decision was going to have significant impact on USD direction.
Thats what happenned..The market moved by 100+ pips for each currency pair in which USD is involved. So, I made analysis of USD/CAD as I felt it started trending. So, look at the chart 1 hr chart I have included here. The MACD was showing no deviation, RSIs were looking below 50..So, all indication of bearish trend to continue.
So, here is the online forex trade I placed -
Entry - 1.1083 to sell
Target - 1.1030
Stop - 1.1115
So, the risk to reward was 1:1.7..Look at the red circle on the 1 hr chart to see the entry point
This is what happenned after I placed the trade.
I looked at the 4 hr chart and that took me by surprise....The USD/CAD was at the support trend line..Look at the blue circle on 4 hr. chart..
I immediately realized that it was not an opportune time to do online forex trading.
Already, I was in loss of 15 pips.
So, there were 3 options for me -
1. Either I close the trade with existing loss.
2. Wait to see if the support trend line is broken.
3. Wait for the currency to test the support once again and then close the trade.
So, option 2 was very risky..So, ignored it. Option 3 was very likely as the cuuency genenerally test a support/resistance multiple times.
So, I waited for the currency pair to test the support level of 1.1085 again.
After 30 min., it did the same again..And you are right, I closed the trade at 1.1087.
Although I made 4 pips loss..still I was happy..Why?? Look at the direction the currency pair after that..
So, the idea is to accept the loss..I immediately felt that my trade may not be profitable and accepted the loss and tried to minimize it. It was a very disciplined trade..
So, I had reason to be happy despite of facing 4 pips loss.
This is all in todays session to learn online forex trading..Visit again to learn some more concepts and tips in online forex trading.
