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Trade SMARTER-USD/CAD Forex analysis with ChartIQ

TradingPub Admin | October 22, 2013

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This article provides some trading guidance how to empower your Forex trading strategy for maximum returns in a sideways market by using ChartIQ’s innovative 9/13 count visual indicator.  We will be reviewing the USD/CAD chart using 1-day candlesticks.  The 9-count and 13-count are momentum indicators (like MACD or RSI) that provide explicit trading signals.  These counts utilize the entire OHLC (Open, High, Low, Close) data set whereas most mathematical indicators use only the closing price.

Based on the charts from 5/7/13, we are LONG USD/CAD but are closely watching for a reversal, which may occur over the next few trading days.  Following is our analysis.

We use the 9-count indicator to determine the trend and identify reversal conditions.  In the chart below you can see these indicators as a series of green (bullish) or red (bearish) bars, which grow as the count continues and show up brighter when a count is completed, signaling a trading entry or exit point.

Let’s dive in and see how these work on the USD/CAD chart for the last six months using the 9-count, and how we determine a position moving forward:

October 22 Chart IQ 1

The visual indicators at the bottom of the chart signify reversals that we use as entry and exit points for positions.  Based on these signals, a trader can swap short and long positions during a sideways market to maximize returns.  Let’s take a look at a real example to see how this works:

Oct 22 Cart IQ 2

We start trading the beginning of July, when the 9-count indicates a reversal and a completed sell count.  At this point, we open a short position at 1.0500.  We hold this position for almost the full month until the next signal completes on July 29th, where we exit the short position at 1.0267 and go long.  This gives us a return of .0233.  Next, at the end of August, we exit our long position at 1.0500 and take a short position, providing a return of .0233 again.  We hold this only a few weeks until August 17th, where we exit at 1.0280 (making .0220) and reverse into a long position.

The 9-count indicator makes it easy to see reversals and lets you take profits in both short and long positions during a sideways market.  Here is the summary of our performance using this technique:

Exiting our initial July short position returns .0233.

Reversing our position in August returns .0233.

Reversing our position again in September yields .0220.

Given the current trend, we will hold a LONG position until the count indicates a change in momentum, at which point we will go SHORT.  If you do not have a long position in USDCAD, it’s advised to wait until a clear reversal signal has been identified.

Both the 9 count and the 13 count indicators are designed to work on any time frame. They can be used for day trading as well as swing trading. They can also be used on longer time frames to time entry for long-term investors. A full description of this unique indicator, advanced features, and techniques for various trading conditions can be found here: http://www.chartiq.com/how-chartiqs-9count-and-13count-indicators-work/.

Stay tuned for more 9/13 count analysis to maximize profits during sideways market trends!