USDCAD Currency Trading Strategies that Work

The concepts around all currency trading strategies for trading USDCAD are based to some extend on crude oil. And to a lesser extend on the US dollar. Being a commodity currency pair, USDCAD offers some nice setups almost every week. These come with variable amount of risk. Sometimes the risk is too low. And sometimes the risk depends on how the trade is made. Traders who practice currency trading well, know many of these critical points. These currency trading strategies have to do with all kinds of analyses, from technical to geopolitics. Because both crude oil, and US dollar are impacted in a subtle way by various events around the world. The best forex trading strategy for USDCAD is the one taking into account these factors. But also the volatility of crude oil. Traders find great solid trends in USDCAD, not easily found in other pairs. This allows them to hold temporary losing trades with the confidence that they will turn around, into winners. It also allows for greater flexibility, and the margin for mistakes is greater. So every time crude oil makes a substantial move. Traders have to re-calculate the actual move based on how much the US dollar moved over the same period. By re-pricing crude oil after a move was made. They are able to see how much of the move was due to the US dollar. The rest of the move is attributed to supply and demand changes for crude oil itself. Crude oil also has its own volatility index, which helps get an idea what the market fears are. With crude oil, unlike the stock market, the fear is always that prices will go to $100 or higher. Therefore a rising crude oil volatility which also stays high, suggests fear of higher crude oil prices to come. This is only fear as expressed by the market. But wise CFD forex traders take it seriously, as it may hint an imminent trend change in crude oil. This volatility number is not straight forward, as it is not exactly correlated to higher or lower crude oil price. It express fear, but depending when crude oil price is, in absolute numbers, fear may be seen differently. For crude oil prices between all time lows, and around $60, the stock market is correlated to crude oil price. And the fear may focus on crude oil actually going lower, which will hinder the economy from growing. Traders have to take these factors into account, and treat each economic phase differently. By asking the question, what role does crude oil play at this very time? And this will allow them to figure out what the market’s fears are about crude oil price.

Implementing these Currency Trading Strategies

Implementing these currency trading strategies on USDCAD is easy, only after the specific role of crude oil and its volatility have been figured out. These as we mentioned are economic-phase specific. But when the trader has understood them well, they know that if crude oil makes a certain move, then USDCAD will simply move in the opposite direction. Analysis of the US dollar is not really necessary except if day trading is required. As the impact of crude oil is smoothed out and offset over periods of few days. This means that the US dollar can make crude oil and USDCAD move. And the move will be somewhat more profound in the currency pair. But only over a period of one to three days. Sooner or later the underlying trend of crude oil will prevail, and the commodity will go where it’s supposed to go. Regardless of the US dollar. Wise CFD traders see this as a forex trading business opportunity in many different ways. As several entirely different day trades can be made during these one to three days. For example one can trade the variable impact of the US dollar on crude oil, through CFDs on USDCAD. And not worry much about longer term direction on crude oil itself. But all the concepts are food for thought, for very good strategies, that actually make it possible to make serious money. All through these 3 markets. The US dollar, crude oil, and USDCAD. There is no need to trade 10 different markets.