Time to Ring The Cash Register: +50 Pips In Yesterday’s USD/CAD Trade
Shain Vernier • 1 min read
Yesterday afternoon I issued a buy recommendation for the USD/CAD as we moved into the late U.S. session. The trade has performed well, racking up 50+ pips profit from the 1.2120 entry during today’s session.
USD/CAD Daily Chart
There are a few aspects of this trade that give me viable reasons to exit and grab the profits while they are available:
Earlier in the session, the USD/CAD traded under Monday’s low, effectively breaking symmetry. This suggests possible prolonged consolidation.
The upcoming API crude oil inventory release is likely to spike participation in this market. That can be either good or bad. Today’s crude trade has been tight. I look for the API to move the market considerably.
Initially, this was a position trade. Given the lack of symmetry, and pending economic data releases, it may be a good idea to take the money and run!
Bottom Line: I am not a big fan of exiting trades prematurely, but in this case it is warranted. As my colleague Skerdian outlined in an earlier brief, the USD/CAD is showing signs of being overbought. In fact, there is an upcoming trading signal prompting a short position in the USD/CAD.
Counter-trend trades are tricky. Aggressive risk management is necessary to be a consistent winner when trading against the grain. So, if you are open in this trade, taking profits now is a good move. If nothing else, move your stop to breakeven.
It is as the old saying goes: No one ever went broke taking profits!