Skip to main content

An Ugly Trade: USD/CAD Swing Trade Analysis


The reality of trading is that there are not so many trades that would go exactly how you planned them.
If somebody tells you that market always does what he predicts and that there are no ugly situations, then I would not really trust such a guy…
Today, I am going to show you one pretty ugly trade which I had on USD/CAD.
This trade did not go as I planned it! At least not at first…
I would also like to show you how important is to stick to your strategy no matter what!

USD/CAD Swing short

The trade I am going to talk about is a swing short on USD/CAD.
I published this level in my Member’s area a couple months in advance and since then we have been waiting for the price to hit it.
The short entry was based on Volume Accumulation Setup and it was at 1.3282. Standard SL was at 1.3321 and Take Profit at 1.3243.
I trade all my swing trades using the Alternative SL. This means that I do not close my swing trades unless a Daily candle closes past my Standard SL. This method also uses a hard Catastrophic SL (if price touches it, then I am out immediately).
*You can learn more about the Alternative SL here: Alternative SL
Below is a Daily chart of the USD/CAD where you can see what the level was based on and how it went.
As you can see from the picture, the trade went pretty ugly. It did not react to my short level (at first) and even the standard SL got hit!
In a situation like this it is very important to stick to your plan no matter what!
Let me now show you a detailed look how this trade went. I will demonstrate on a 30 Minute chart:

Detailed look (30 Minute chart)

1. Before my short was hit, there was a strong buying activity showing aggressive buyers. It is not really a good feeling to go short against such force, right? But you gotta stick to the rules, so I went short as planned.
2. Then there was a rotation around my short level. I know that many people don’t like when the price does not react immediately to their level. But I don’t mind. In my experience, markets need their time. In fact I was happy that the strong buying stopped and I did not take an immediate Stop Loss.
3. This is when it all went sour! There was a crazy strong pin bar showing aggressive buyers (formed during macro news).
4. Next ugly thing after the pin bar was another strong buying activity. After this the price actually hit the standard SL! At that moment it seemed like almost 100% certainty that this trade would be a loser.
Despite all this I held my position according to the rules. Daily candle still did not close above the standard SL! You gotta stick to the rules 🙂
5. The first positive thing was when this strong rejection of higher prices occurred. Sellers are back! Hooray!
6. When the price went below two strong lows (highlighted in red) I knew we were heading for the Take Profit!
Finally, after 11 days!
What I wanted to show you with this is how important it is to stick to your rules, no matter what happens. Pro traders don’t change their rules in the spur of the moment or based on their emotions.
Next time some trade looks ugly and you want to break your rules, remember this trade, okay?

BONUS: VWAP as Take Profit

There is one more little thing I wanted to share with you here.
If you look at the Daily chart again, then you can see how the Take Profit nicely aligns with 1st Deviation of Yearly VWAP.
This 1st Deviation indicates a possible price reversal there (Trend VWAP setup I teach in the VWAP Video Course).
That’s what I call a good place to quit a short trade!

Intraday longs along the way!

By the way, I grabbed two nice intraday trades during this swing trade.
Funny thing is that despite I was short with my swing trade, those intraday trades were longs!
Below are the two intraday longs. The second one was actually at the swing trade Take Profit!
Both longs were also published in advance for members of my Trading course.
USD/CAD; 30 Minute chart:
I hope you guys found this interesting! Feel free to leave a comment below and let me know what you think!
Happy trading!
-Dale

Comments

Post a Comment

Popular posts from this blog

Beginners Guide to Order Flow PART 1: What Is Order Flow?

DEFINITION: Order Flow is an advanced charting software which enables you to read all trading orders that are processed in the market. It helps to track the BIG financial institutions through the trades they make. Most people get confused when they open up a chart with Order Flow for the first time. There is no shame in that. Order Flow shows so many information and it is easy to get overwhelmed and confused if you don’t know what to look for! This Beginners Guide will teach you how to understand how Order Flow works and how you can use it in your trading! In this 1st part of the Order Flow Guide I will show you around the Order Flow interface. Footprints The Order Flow does not show standard candles, but it shows FOOTPRINTS . A footprint shows not only Open, High, Low, Close (as standard candles) but it also shows orders traded in that candle. Orders can be...
Post a Comment
Read more

NZD/CHF – How To Trade The “b-Shaped” Profile

Today’s intraday analysis will be on  NZD/CHF  and I will start by talking about the structure of the  Weekly Volume Profile . Weekly Volume Profile structure In the previous week, there was a  “b – shaped” Volume Profile histogram formed. b – shaped histogram means that the shape of the histogram  looks like the letter “b”. It says that the market sees the value at the bottom half of the profile while rejecting the upper half. If you look at the picture below, you can see that there was a  rotation  (Monday, Tuesday), then strong  buying activity  (Wednesday), and then an immediate  rejection and a sell-off  (Thursday). Then again a  rotation  on Friday. One of the most important things to notice in a b – shaped profile is a  volume cluster created in the rejection area. In this case, there were two of them. Such a  volume cluster  indicates a place where the  sellers were...
Post a Comment
Read more

How To Trade The Point Of Control (POC)

DEFINITION: Point Of Control (= POC) is a price level at which the heaviest volumes were traded. The most important thing that the Volume Profile indicator shows is the POC. I dare say that if you used Volume Profile only for the purpose of identifying the POC, you would be a way better and trader then 99% of the retail traders. No matter what trading strategy you trade. Why do I say this? Why is POC so important? Point Of Control is so important because it shows the place where the most trading took place – where the biggest trading positions were accumulated. POC shows the BIG guys! Who accumulates those huge trading positions? The BIG guys – that’s the big financial institutions like hedge funds, pension funds, huge banks, etc… It is those BIG guys who move and manipulate the markets. It would be a huge advantage to know where they placed most of their positions, right? The good news is th...
Post a Comment
Read more