EURCAD has been moving in a slightly descending channel, here shown as a linear regression channel. The last iteration of the Price drove it from the top of it to near the bottom. There, it made a double bottom figure and headed up again. After being rejected by the central regression line (dotted line), the Price retraced slightly, then, four hours ago, The Price made a piercing candlestick followed by a large candlestick that went above the last high.
A trade can be made with the entry at 1.5191, a stop below the recent low (1.5110), and a profit target neat the last high of 1.5374. for a reward/risk ration of over 2.
The technical factors ate in favor of the trade. The price moves above the +1 sigma line of the Bollinger bands, and the bands are heading up. Also, the Stochastic oscillator has triggered a buy signal near the oversold level.
The Setup
Buy Entry: 1.5191
Stop-loss:1.5110 or lower
Take-profit: 1.5374
Reward/Risk: 2
Dollar risk: $575 on one lot. $57.5 on a mini lot, and $5.75 on a micro lot
Dollar reward: $1,150 on a lot.
It is recommended not to go above 1 percent of your balance in a single position. Thus, traders should not take more than two micro lots for every $1000 in their trading account.
