USD/CAD 15-min trade example

This is a completed trade example, this trade was originally posted in the LIVE 90 day forex trading bootcamp member’s area.
June 23rd 2010: I just placed a trade on the USD/CAD 15-min charts. I’ll add more details soon, but want basic trade info to be public for now. Here are the details:
currency: USD/CAD timeframe: 15-min charts
I – 1.0308
II – 1.0457
III – 1.0359
IV – 1.0549
Entry -1.0398 long
Stop -1.0308
Limit – 1.0549
Reward/Risk = 167.87%
Potential Reward = 151 pips
Risk = 90 pips
Here are 2 screen shots:

100% Valid to Stick With Trade

Since this trade met all entry requirements, no adjustments are required. You could stick to the original trade plan, but since the 2nd wave may have failed (we don’t know yet for sure), it’s possible to make an adjustment. I made this adjustment & explain why below.

Trade Update – Stop Adjusted

After nearly 24 hours, I have adjusted the stop on this trade. The stop has now been moved up to the entry price of 1.0398 because a new high had been reached (point IV on picture below): Once the price in this trade reached a point higher than III, the stop can be moved from I to III. In this case I used my entry price as III. This trade is now a “risk free trade” because no loss is possible. I still haven’t changed my limit, but if we approach the most recent high (IV), if the trend turns down again, I will look for an opportunity on the 5-min chart to exit. The most recent movement on the chart looks like a potential candy-cane, so we could still see an upside breakout. We’ll probably be in a consolidation channel until the US market opens tomorrow.

2nd Wave Failure?

If you look at the 15-min USD/CAD chart above, you can see that the second wave after our initial I-II-III wave setup did happen, it was simply collapsed and distorted. This is due to a slowing momentum in the trend. This is also forming a potential double top. In this situation, we have some warning that the price might go down, so raising the stop is a good idea. This is a little more involved of a trade, but a good learning opportunity.

Waiting for a 61.8% Level

The most recent movement is potentially forming a new candy-cane. This would happen if the current price moves down to 1.0414. Once this happens, it could bounce up further. In this case, the price moving down a little bit isn’t bad… Of course the price could continue to go down, so we’ll have to wait & see.

Stopped Out for $0 Loss

Right before the North American market opened on June 25th, this trade hit it’s stop for a $0 loss. The loss was $0 because the stop was adjusted when we entered the second wave. See the picture below for when the stop was hit:

Final Trade Thoughts

This was a good first trade for the LIVE 90 day forex trading bootcamp. It introduced an adjustment strategy that I was planning to share a little later, but have now shared. I’ll be preparing a video to describe this in more depth. Now the forex market is closed, but next week will be even more exciting as I find more trades to share with you. The frequency of trades will increase, this week was kept intentionally slow to allow people time to follow a trade for possibly the first time!

$2000 Account

Due to a miscommunication, this trade was placed in a $2,000 eToro trading account, not a $200 account. It turns out that they decided to put some commissions they owed me into my trading account earlier than the normal payday. I think they did this as a favor to me even though I didn’t ask them to. I followed money management rules for this trade based on a $2,000 account. When I get this matter sorted out, I’ll be posting trades from a $200 account as previously stated.

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