USDCAD: The Rising Wedge Pattern Explained

As price action blew through the potential double top that we were watching this morning in the Live Trading Room, we had to throw the idea out and start looking for other opportunities.

Currently we have a setup on USDCAD that I really like. It's called a rising wedge. This setup starts with a strong bullish move then as selling pressure starts to enter the market (from actually sellers, and from buyers who are selling to take profit), momentum starts to slow & price begins to flaten out. When combined with divergence on the rsi (and for me) a good level of structure, it makes for a very tasty trading opportunity.

So what's wrong with this situation? Well the fact is that we're so close to structure that there just isn't enough room to get a good enough risk to reward ratio. So I'll have to play the sidelines and watch.

Now before you think about forcing this trade REMEMBER THIS if there's one thing that we know about trading it's that "THERE WILL ALWAYS BE ANOTHER GOOD OPPORTUNITY"

Good luck out there traders! And thanks to all of you that were so quick to comment on my latest video blog!