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Post of the Day: USD/CAD
Friday, 10 October 2008 07:21:11 GMT  |  Richard Krivo, Power Course Instructor
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Student’s Question:

Pair is in up trend and looking to buy…is this a break out opportunity?
Are my Target price and Stop loss ok?
If so where should i set limit order. As my loss could be 70 pips should i look for 1.1290 (140 pips 2:1) or 1.1360 (210 pips 3:1)

Chart 10 09 08

Power Course Instructor’s Response:

You are correct that this UASCAD pair is in an uptrend so we should only be looking for opportunities to buy.

A breakout is when price action breaks above or below a trading range that has been established over a bit of time...as marked on the chart below.

Since the pair has been in a strong uptrend for several days, it might be prudent to wait until it retraces (perhaps to the level of the second breakout as that is now support) and then take a long position. Should the pair, however, break above the channel line (the green line which you have marked), then a long position could be taken after a candle closes above that level and a stop would be placed just below the upper channel line.

Yes. A good way to estimate a limit is simply multiply your stop by 2. As the position moves in your favor, the stop can always be trailed up to lock in profit as you go.

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