GBPCAD Weekly Forecast Last Friday GBP/CAD formed a pin bar candlestick pattern at the 1.7870 resistance level which could potentially lead the price lower this week. The short term momentum is heading South which add weight to the pin bar candlestick pattern. On the flip side, we can see a support level just below the pin bar candlestick pattern at 1.7800 thus the price would need to break below this 1.7800 support level to validate this bearish signal. Our recommended trade idea is as below: Entry: 1.7795 Stops: 1.7810 Stops 2: 1.7950 1st Target : 1.7660 2nd Target : 1.7540 3rd Target : 1.7200 We have 2 choices of stop loss placement for this short signal – the first is to place the stop loss a few pips above the 1.7870 resistance level while the second choice would be the traditional way of placing stop loss above the pin bar candlestick pattern. The first choice would offer a tighter stop loss thus increase the risk:reward ratio while the traditional way of placing stop loss will give the market more room to move which decreases the chance of being stopped out before the market moves in our favor. It depends on the traders risk appetite and preference in choosing where to place the stop loss order. The 3rd target for this trade idea is quite far away from current price thus its recommended to employ a trailing stop when the price moves in our favor. Share with your friends!
Posted on: Mon, 01 Dec 2014 10:03:07 +0000