Today, the USD made a small rally against the 2 month Beairsh trend on the USD/CAD.
The 40 pip rally puts the USD/CAD in perfect position to short off our recent trend line with a high Reward/Risk ratio.
Last week I shared a NZD/JPY trade that didn’t have the highest probability of winning but I liked the trade anyway due to its generous R/R.
This USD/CAD trade is a similar situation. By being aggressive and shorting at today’s close, we could enter with a 20 to 30 pip stop and target 80 pips or even a recent daily level 180 pips away.
The stop placement is very subjective in this case. I’d recommend 15 to 20 pips above last week’s high (May 13).
As I said, this is not an extremely high probability trade because the market can easily shake us out of the trade; however with the R/R on the table, I think the risk makes sense.
Let me know what you think.
Winner’s Edge Trading, as seen on: