I just had a sit down with 3 of my good friends, Cato, Jaco and Alex. During our we were going over WTI / Oil a little bit and I gave my reasons why I believe it will head higher, then Cato showed me something which increased my belief in the WTI / Oil buy trade idea.
Cato told me to take a look at USDCAD's weekly chart, I naturally did exactly that, once I came to USDCAD's weekly chart, I saw and excellent trade setup, and we will come to this trade idea in a minute, but before we head to loonies weekly chart, I must go over USDNOK.
USDNOK Daily Chart
(click on image to enlarge)
Ok, so after checking WTI and then looking over Cato's idea on USDCAD I just had to look at USDNOK, which is also highly correlated to Oil's price just as USDCAD is.
After looking at the pair I came to a clear commitment that now is an excellent time to sell USDNOK and below I list my reasons.
1. The daily chart has created 3 lower high: This is an excellent bearish indicator which has an above average success ratio
2. Price action is right now at the 30% reversal level
3. The 30% reversal level is connected to a trend line, this trend line is connecting all 3 patterns, the 3HL's and the 30% Reversal
As you can see I have added 3 profit target levels, I am happy to get out at the first level as it will give me a reward x3 higher than my risk.
If however you decided to keep your TP at T2, you are looking at x6 the profit of the risk and finally, if you target T3 level, then you are looking at an insane, x9 reward of the risk.
Of Course that is only nice if price action actually heads down to 7.5000.
My SL is at 8.28185 and my TP at 7.9500.
Let me know if you decide to take this trade too in the comments below!
Happy trading in the new week and may the pips be with you!