Trading Forex and CFDs is risky
Read HotForex Daily Market Analysis

Candles, Moving Averages and the ATR

Market Analysis

NZDCAD, Daily

Opportunities are everywhere when trading and its not just the main popular pairs that react to market forces be they technical or fundamental. This week has all been about the political fundamentals and two of the three major central banks. But as we can see from the NZDCAD pair opportunities are indeed everywhere.  In a strong uptrend on the Daily time frame for most of January the pair posted a near classic Tweezer Top, and strongly bearish Engulfing pattern on Wednesday, which was confirmed on last nights close to trigger an entry to the short side.

1. Tweezer Top completes following…
2. A failed break of the 200 Moving Average and close below of that key moving average.. then
3. Big down candle on Wednesday which Engulfed (Tuesday, Monday and Friday) – Thursday – a Long Wick and trigger on the Close.
4. Entry Today at 0.9068
5 T1 – ATR (Average True Range ) and Number 8  on the chart (80 pips) – multiple it by 1.2 as we are with the Higher Time frame trend (this case the Monthly chart, which is also negative) = 96 pips  – 0.8951
6 T2 – The next resistance / turning area – 0.8888
7. Stop LossWhere the Stop Loss  HAS to be — above the latest High and turning point. – 0.9172

Risk Reward a little over one but has enough probability for system to say go, even though the price has not crossed the 20 day moving average and mid line of the Bollinger Bands (which is one of my key triggers). This area will be the first resistance zone to the move down and if it holds a possible reversal area.

 

Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:

Stuart Cowell

Senior Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Risk Warning: Trading leveraged products such as Forex and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital. Please read the full Risk Disclosure.

Risk Warning: Remember Forex and CFDs are leveraged products and can result in the loss of all invested capital. Please consider our Risk Disclosure.