The Daily Trade – Day 33

Filed under: Learn Forex Trading |

Trade Number 33 – AUD/CAD 1 Hour Chart

I have another trade example for you today, this time on the less popular AUD/CAD forex pair. A lot of people try to focus on the forex major pairs for their fluidity and supposedly more reliable setups. However, I find that all forex pairs or equal (but some pairs are more equal than others!). Anyway, without further ado, let’s get on with the trade.

 

Figure 1.

If you look at Figure 1, you will see that price reached a previous resistance level. This had been respected on five or six occasions in the past, so we should have been looking out for price action signals at this level. Although you could say that we are trading against the trend here based upon the moving averages, which are going up, you can see from visual inspection that the pair has been moving sideways for some time.

 

Figure 2.

If you now look at Figure 2 on the 1-hour chart, you will see that a bearish engulfing pattern emerged at this key zone, which also had a nice bearish tail on it also. This was our cue to get in on a sell trade with a risk-reward of 1:2 as this fit in with the last swing high point on the 1-hour chart, which could act as support.

 

Figure 3.

In Figure 3, you will see that this minor support level was respected, but by this time; we had already reached our target for a 2% rise on our bank. Not bad for a few hours, especially considering that 2% is a good amount to save on your savings in a year in the bank these days! It is also interesting to note that another small bearish engulfing pattern emerged when price when back up to our zone, from which we could have had another trade and another 2% target. Well, that’s all for today – so see you next time.

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