Strongest trend lower

Using the VolatilityMarkets software to structure a USDCAD trend following trade idea.

Part 1) Introduction

VolatilityMarkets suggests trend-inspired trades that capitalize on market trends.

In the short term USDCAD has been accelerating lower. In the long term USDCAD has been decelerating lower. With the long term trend being the stronger of the two, we propose a short trade idea with a one week time horizon.

Part 2) Trade idea details

Chart

Sell $ 102,110 USD or 1.02 lots of USDCAD ,take profit at $ 1.33 level with 50.0% odds for a $ 1,000 USD gain,stop out at $ 1.3563 with 50.02% odds for a $ 1,000 USD loss through 1w time horizon.

Part 3) USD/CAD trend analysis

USDCAD

USDCAD last price was $ 1.337845. The long term trend decelerating lower is stronger than the short term trend accelerating lower. This trade goes short when the price was moving lower and decelerating over the past 19 days.

Part 4) USD/CAD value analysis

Chart

Over the past 19 days, the USDCAD price increased 9 days and decreased 10 days. For every up day, there were 1.11 down days. The average return on days where the price increased is 0.3957% The average return on days where the price decreased is -0.5305% Over the past 19 Days, the price has decreased by -1.77% percent. Over the past 19 days, the average return per day has been -0.0932% percent.

Part 5) USD/CAD worst/best case scenario analysis

CHart

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for USDCAD, is $ 1.304419 , and the best case scenario overnight is $ 1.381811 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that $ 1.3563 could trade and that $ 1.33 could trade. These levels are within statistical probability.

Key takeaways

  • Price today $ 1.337845.

  • Over the past 19 days, the USDCAD price increased 9 days and decreased 10 Days.

  • For every up day, there were 1.11 down days.

  • The average return on days where the price increased is 0.3957%.

  • The average return on days where the price decreased is -0.5305%.

  • Over the past 19 Days, the price has decreased by -1.77% percent.

  • Over the past 19 days, the average return per day has been -0.0932% percent.

  • Over the past 19 days, The price has on average been decelerating: -3.2944 pips per day lower.

  • Over the last session, the price decreased by -37.05 pips.

  • Over the last session, the price decreased by -0.2769 %.

  • Over the last session, the price accelerated by 37.05 pips.

Volatility Markets provides trend following trade ideas for momentum traders. The Volatility Markets Newswire measures the direction and acceleration of a security and then structures a trade idea to capitalize on the trend. While trends have been shown to exist in markets over the past 100 years, they are no guarantee of future asset prices. You should take these ideas lightly and at your own risk.

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