EUR/CAD forex swing trade idea: How to play the long term trend accelerating higher

Introduction

VolatilityMarkets Swing Trade Idea

Swing trading is a mean reversion contrarian strategy that aims to buy low and sell high. The assumption behind swing trades is that securities will return to their long term average. Scalping and Swing Trading are two sides of the same coin but Scalping's time horizon occurs over the course of a day or intraday whereas swing trading has a longer time horizon. Swing strategies tend to work well in choppy markets and with macro reversals.

Market summary

Price

EUR/CAD last price was € 1.486459.

Trend analysis

In the short term EURCAD has been accelerating lower. In the long term EURCAD has been accelerating higher.

Value analysis

Over the past 20 days, the EURCAD price increased 10 days and decreased 10 days.

For every up day, there were 1.0 down days.

The average return on days where the price increased is 0.6354%.

The average return on days where the price decreased is -0.3779%.

Performance

Over the past 20 Days, the price has increased by 2.56% percent.

Over the past 20 days, the average return per day has been 0.128% percent.

Trade idea

Taking into account the long term mean percentile of 95.24% which is historically expensive , a short trade idea with an overnight time horizon would make for an optimal swing trade.

Swing trade idea

Sell € 369,281 EUR , or 3.69 lots of EURCAD, take profit at € 1.4933 level with 25.0% odds for a € 1,708 EUR gain, stop out at € 1.5004 with 49.97% odds for a € 1,000 EUR loss through a one Week time horizon

Intraday predictions

EUR/CAD trend analysis

EURCAD last price was € 1.486459. The long term trend accelerating higher is stronger than the short term trend accelerating lower. This trade goes short when the price has been moving higher and accelerating over the past 20 days.

EUR/CAD value analysis

Over the past 20 days, the EURCAD price increased 10 days and decreased 10 days. For every up day, there were 1.0 down days. The average return on days where the price increased is 0.6354% The average return on days where the price decreased is -0.3779% Over the past 20 Days, the price has increased by 2.56% percent. Over the past 20 days, the average return per day has been 0.128% percent.

EUR/CAD worst/best case scenario analysis

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for EURCAD, is € 1.445622 , and the best case scenario overnight is € 1.527296 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that € 1.5004 could trade and that € 1.4933 could trade. These levels are within statistical probability.

Expected range

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for EURCAD, is € 1.445622 , and the best case scenario overnight is € 1.527296 . levels outside of this range are unlikely, but still possible, to trade.

We are 50% confident that € 1.5004 could trade and that € 1.4933 could trade. These levels are within statistical probability.

Probability vs payout chart

This graph contrasts the percentage payout of holding a position vs the probability that the payout occurs. The red and green columns represent the probability of stopping out and taking profit and their associated payouts.

Key takeaways

• Price today € 1.486459.

• Over the past 20 days, the EURCAD price increased 10 days and decreased 10 Days.

• For every up day, there were 1.0 down days.

• The average return on days where the price increased is 0.6354%.

• The average return on days where the price decreased is -0.3779%.

• Over the past 20 Days, the price has increased by 2.56% percent.

• Over the past 20 days, the average return per day has been 0.128% percent.

• Over the past 20 days, The price has on average been accelerating: 2.4889 pips per day higher.

• Over the last session, the price decreased by -48.35 pips.

• Over the last session, the price decreased by -0.3253 %.

• Over the last session, the price decelerated by -94.49 pips.