Last weekend I wrote about the USDCAD that made a lower low here. I suggest you read that post first before reading this one.
The pair did retest the previous level of support (now potential resistance). The candle on Friday (19 March) is an indecision candle, which for my strategy will require additional confirmation before I will enter.
The chart below is the 4 hour chart of the USDCAD for this past week and will be used for the discussion that follows:
The same level of interest that was identified last week is shown on the 4 hour chart above. If you trade / are interested in support and resistance, and candlestick trading, then the above is a nice example of multiple time frame trading / analysis.
Multiple time frame trading in this case would be the level of interest on the daily time frame identified last week and then getting and entry on a lower time frame. In this case it was the 4 hour chart with shooting stars and a bearish engulfing candle as possible reasons to enter as shown by arrows on chart. I did not enter as I mainly trade the daily charts.
Multiple time frame trading can be as simple as that. The time frame you chose are really up to you, in this case it was the daily and 4 hour. But for those that have less time (work full time like me ) it can be a weekly and daily chart combination. Or a combination of intraday charts for other people that have more time.
Always remember to manage risk. The USDCAD can go anywhere from here, no matter how big a support / resistance level is, or how great a candlestick looks.
As an aside: I mentioned last week that USDCAD is very weak compared to the other major USD pairs. Canada is a big oil producing country so when oil is trading strongly (which is the case for the last couple of months), usually so is the “CAD” in the Fx pairs. This could be one of the reasons why the USDCAD is so weak.
On Ideas: Please don’t take this as trading advise. Please do your own due diligence before entering any trade. Also see Disclaimers.
Thanks for reading.
Thanks and Regards,
Trading SOS SOS