BUY USDCAD: FIBONACCI RETRACEMENT-RETRACEMENT CLUSTER (MISSED TRADE)

Though, it's been quite some time since I had missed trades, I do not miss the feelings; and I certainly would have wished it never happened (in case it inevitably had to happen) in a trade destined for over 130 pips.

The pattern on 4-Hour time frame looked like a bearish wedge only that bearish wedges form prior to a down trend. SO, I never mistook it for a wedge -- it was simply resistance and support levels converging at a point.

On 1-hour time frame, a thin trend line was drawn to join close of lows to form cluster with the thick resistant trend line. The region covered by the trend line cluster is a buy zone.

Fibonacci retracement tool was drawn from swing "1" to swing "4", and another was drawn from swing "3" to swing "4" to form Fibonacci cluster). The confluence between the two clusters (Fibonacci retracement cluster and trend line cluster) is a perfect spot to go long.

To further enhance the bullish bias, bullish divergence formed (note line on Stochastic).

Buy Limit order was executed  at 1.3125, Stop Loss at 1.3086 (38 pips), and Target at 1.3264 (139 pips) on seeing a bullish engulfing formed inside the cluster.

EVENTUALLY

Since jumping into the trade would have meant setting a wider Stop, I opted for a pending order. But price did not look back after the bullish engulfing. It rallied high and on to the target, with me left to wallow.

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About Moshow

Oseni Moshood ( Moshow) is a physicist, a blogger and a spot trader with years of experience. He trades only price actions partly because he thinks Economics is boring; or, probably because he failed Economics; and he loves fine artistic works.