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

Bitcoin is Dropping Hard! Here’s Where Smart Money Will Buy Again

Video Transcript: Hello everyone, it’s Dale here. In today’s video, I’d like to talk about Bitcoin. The reason is that Bitcoin has been dropping like crazy, and a lot of traders are wondering where Bitcoin will go and what to expect. If I look at the chart and use Volume Profile, I would say that it’s pretty straightforward because Volume Profile very clearly shows the strongest support and resistance levels. So, let’s take a look at the chart, and let me show you. What you see before you is the daily chart of Bitcoin. This is the big picture, and as you can see, from the all-time high here, Bitcoin experienced quite a significant sell-off and is currently dropping. Right now, I don’t really see any strong support that would stand in the way of this strong sell-off. Let me use Volume Profile and show you what could actually stop the sell-off of Bitcoin. All right, so what I’m going to do is apply Volume Profile over this whole area to see the volume distribution. As you can see, there ...
Post a Comment
Read more

Quick In & Out Trade on USD/JPY – Smart Money Concepts & Volume Profile

Video Transcript: Hello everyone, it’s Dale here. Welcome to the next video of the new series, where I’ll talk about my recent trades. Today’s trade is on the  USD/JPY . It was a very quick in-and-out trade, so let’s check it out. What you see before you is the 30-minute chart of the  USD/JPY , and the level I was trading from was this short level at  149.63 . The reasoning behind this level—let me zoom in a little so you can see this better—was the volumes that formed here. From this place, there was a sharp sell-off. Even though the volumes do not particularly stand out, what’s important is that from this zone, there was a strong sell-off. There was also a  Fair Value Gap . My software highlights that, but when the gap is filled, it’s not highlighted anymore. If I mark it for you, this was the Fair Value Gap, which is a setup from Smart Money Concepts. I like to trade from the beginning of the Fair Value Gap, which is here. This is also the beginning of a heavy vol...
Post a Comment
Read more

ORDER FLOW: How to Trade the Absorption Setup (Trade Entry Confirmation)

Video Transcript: Hello everyone, and in this video, I’d like to talk about order flow and one of my favorite confirmation setups in order flow. The confirmation setup is called the absorption, and I’ll show you an example of a trade I made a couple of days ago. I think this is the perfect example of how you can use the absorption setup to confirm your trade entry. So, let’s take a look at it. First, let me start by showing you the level I wanted to trade, and then I’ll show you the absorption setup. You’re looking at the  EUR/USD  30-minute chart, and I had a long level here, marked by this line. This was a long level based on a Volume Profile setup, focusing on those heavy volumes formed within this important rejection. So, this was the long level. What happened was that the price started to go into a sudden sell-off, and there wasn’t really any strong macro news behind this. I wasn’t really sure what was going on, but there was this sudden sell-off, this spike move. Because...
Post a Comment
Read more