Trade Example – GBP/CAD

Filed under: Learn Forex Trading |

We currently have a live trade in play, which is nicely in profit at the moment, but as it was a trade taken on the daily chart, this will take a while to come to a logical conclusion. Therefore, I have decided to take you through another trade example today – this time on the GBP/CAD forex currency pair, which is the pair for the Canadian dollar and the British pound.

 

Figure 1.

Figure 1 shows that the trend of late has been very bullish. The 8-day exponential moving average has crossed above the 21-day exponential moving average, confirming this bullish momentum. There have also been many more white bull candles than black bear candles, which is always a good sign. The broken green ‘buy’ line on this chart is the trade we took as a live trade. This was a trade at the break of the bullish pin bar. However, had we been eagle-eyed, we could have got in even earlier.

 

Figure 2.

Figure 2 shows the 1-hour chart for this same GBP/CAD pair. What we can see here is that there was a nice intraday level of support that price was reacting to, and this also happened to be where the 150-hour exponential moving average was as well, which is a very significant area of confluence. So when a bullish engulfing pattern formed here, we could have taken a long trade at the break of the high of the bullish candle, with a stop loss just a few pips below the low of the move and a target of three times our risk. Figure 3 shows that this trade would have been successful for a very nice 3% rise on our bank. That’s it for this week I’m afraid, but I’ll be back next week with more trade examples and live trade analyses.

Figure 3.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>