All of our followers who traded according to our previous USD/CAD analysis made a lot of money by selling CAD with a PUT option.
For my last analysis I used the Bandit strategy with bollinger bands which is based on the standard deviation of price trends for a particular asset. The standard deviations are marked at 2SD and 3SD using bollinger bands. Now, I’m going to use Moving Average Convergence Divergence (MACD) and Stochastic models to analyze the market.
The currency pair USD/CAD made a tremendous downward move, hitting 1.43 – the resistance line from the year 2000 and before. What an amazing move with almost 5,000 pips! It’s a great opportunity to search for a retrieve of this great currency pair.
If we take a look at the weekly chart, we notice for 2 signals pointed from the indicators, there is a clear diversion while the chart is in an uptrend we see a downtrend on the MACD. The stochastic model approves our sell signal by crossing the K-D parameter lines while they are above 80. It tells us about over buying for this currency, all-in-all we should expect to win some PUT options.
Now you just need the right timing in order to make the trade. Let’s zoom in on a smaller time frame. Looking at a one hour chart – this time a naked chart with no indicators on it so the picture is clear.
The USD/CAD is moving in a tunnel. Once we witness a breaking point from the resistance line or if it reaches the resistant line of the tunnel, it’s the right moment to win some PUT options. Remember that you still need a good setup on the time frame you plan to trade with.