Posted on November 6th, 2008 at 9:35 AM

While conducting the Mentoring Tuesday evening, a customer asked to see the Canadian Dollar. We checked out the 60-minute time frame, and found that it was in a Counter Trend Buy setup. After making sure we had proper support and good divergence, we took a look at the Daily chart of the same market. The Daily of CAD happens to be in a Stochastic Continuation BUY. So we have two separate time frames, two separate trading strategies, but both telling us to do the same thing!

The trigger long on the 60-minute chart was at 1.1525 with a stop down at 1.1450. We had a retest of the lows later that night, but never took out 1.1450. Thus, those who took it on the first breakout should still be long.

On the 60-minute, an aggressive Regression Trend Channel would get you in with only 75 pips of risk. If that sounds like a lot to you, consider that if you get in on the 60-minute chart, and manage the Daily chart trade, you have a roughly 24-to-1 Reward/Risk trade! That means that there are 1800 pips of potential reward to the top-side of that trade! I know of at least 3 people who took the trade in the class. Two of them used real money, and a third took it as a paper trade. I will not reveal who these people are. However, if they care to comment and keep us posted as to how they are managing this trade, that would be great!

Nate McCartney

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