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#305 (permalink)

07-02-2009, 09:03 AM

Thomas Long Thomas Long is offline

DailyFX Power Course Instructor

Join Date: Nov 2007

Posts: 658

Thomas Long is an unknown quantity at this point

GBP/CAD

The GBP/CAD is in an uptrend on the daily chart and shows a pullback down to support on this 4-hour chart. This is a buying opportunity. As usual, there are a number of approaches one can use to time their entry and on this chart I have the MACD plotted. The MACD is typically one of the last technical indicators to signal an entry, but that is not always a bad thing. Early entries can sometimes result in losing trades as the pullback is not always completed when first noted. No matter what entry method is used, traders should still indentify their risk before entering into the trade and look for twice that risk in potential profit. This is our 1:2 risk:reward ratio and allows us the chance to be profitable without having to win more than half of our trades.

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