USDCAD Escape from the Matrix

Updated

The Matrix has you. Will you take the red pill? Or the blue pill?

I marked some entries with arrows above or bellow the signals that trigger a position (in the direction of the arrow and the candle) at the closing price of the candle. I also highlighted some weaker signals that would have ended in stop losses. It is hard to pick the strong signals from the weaker ones, but I try and do my best, and sometimes practice counts towards experience and sometimes experience counts for better decision making and results.

I actually traded that big bearish candle marked with "x" (Short at closing price). I stopped out with my trailing stop at the white dot level. All trailing stops are marked for the purpose of providing examples with dots. I prefer using trailing stops using the big candles in my position direction just in case I am on a big wave that can go to unexpected levels without looking back. Those moves might be rarer (blue arrow example) but they count on the bottom line of the trading account. And they can make up for the potential losses of the weak or uninspired signals.

As an exercise of prediction or intuition, I placed some rectangles in our matrix just to watch out for any specific, interesting events near them. I also marked some levels which could turn out to be support and resistance levels. I am highly interested in any candlestick shadows that might appear at these levels, or even a close of a candle that qualifies as a potential signal.

How will USDCAD Escape from this Matrix? Does it even matter if we just trade the good signals and ride the wave? Sometimes it does not matter to know or predict the future. You just have to make the right choices, or we have to understand our choices in case we are living in a Matrix simulation and our choices are 100% predicable.

Happy trading and may the profits be with you!

PS: If you were living in a simulation with 100% of your choices being predictable from the perspective of the knowledge of all information available about you and the world you interact with, would you fight for that 1% of control? or would you completely abandon the notion of Free Will? Would you take the Blue Pill or the Red Pill? Would you fight Enlightenment? Or would you die for it? The Death of the Ego is one of the Worst Experiences a human can experience. A nightmare. Just like the notion that we are in a simulation. Not even rats in a lab science project. But bits of information in a Quantum Supercomputer that dictates where our markets go.

Note

Note

Interesting price action at the rectangle. I still haven't found an attractive bullish candle to signal the potential beginning of another power wave similar to what happened after the X marked bearish candle.

Note

3rd attempt to break the white line. Let's see where the day closes.

Note

After several bounces from the rectangle downstairs we are now straight at the edge of the upper smaller one with the marked date for tomorrow. Long bullish candle for today which is not over, but I marked the theoretical trailing stop with a grey dot under it. This pair can be very wild sometimes with big moves up and down until it shoots on the path of least resistance. It can still be tradable though, if you catch the right direction on a good wave.

Interestingly enough, above the marked white arrows from the previous update was the white rectangle lurking in the skies. If this Matrix is about to keep being on point with the coincidences, something might happen at this smaller rectangle with the marked date. Let's watch and see.

Note

Moved trailing stop below.

Note

Interesting potential bearish candle at the edge of the small rectangle. This might be an interesting signal to trade with a short even if the long position remains opened. Stop loss would be above today's high. Not take profit range. There are two main scenarios in such a case. Either one of them stops out and the other remains opened in the green, or the short could be closed in the next trading days at break even or with profits while the long remaining open with the same stop loss or a new trailing one.

The day is not over though, and this candle might look totally different by the close.

Note

Yesterday's candle closed in a neutral model. As of now the candle for today looks interesting for a potential hedge with the stop loss at the marked price level, but the day is not over and this might look different by the end of the trading day.

Note

The bearish from the previous update did not finalize at the end of the day. We have pierced the marked level above and the white dot (symbol for trailing stop) is raised below today's low after a big bullish move.

Note

We are above the marked price 1.34 and the blue pill is closer than the red. Considering the long rectangle lurking above.

Will we see another bounce from one of the rectangles in the future of this matrix? It might provide another trading opportunity.

Note

The price is right at the long rectangle on the top and tomorrow is a marked time stamp date. Does the pattern repeat itself and the rectangle is pierced like on the other marked date? Or is this a different type of rectangle?

Red Pill still in sight. After that, hopefully we can wake up from this Matrix.

Note

We have a very interesting potential bearish candle for today if it stays like this. Right inside the long rectangle. Trailing stop should be around 1.347 now. I don't know if this rectangle from above will be retested if it starts falling.

Note

Two candlestick shadows (highs) at the top of the long rectangle. Temporary resistance in this zone unless it starts dropping. There have been some bears in play today but we are now right near the open price of the daily candle. Hard to pick this spot as a potential pivot point regardless of the rectangle and the price action inside it. The trailing stop at 1.347 is still safe for now.

Note

This long rectangle near the red pill was hard to break. High at 1.36 for today but we are back near 1.353 and tomorrow is the last day inside the rectangle. All bets are off. There are still some hours left until the candle closes though.

Note

Hit on the red pill.

Note

Interesting turnaround at the red pill and the marked date of 28, but I am not convinced this is the end of the big bull wave and a correction is expected. Stop loss should be around 1.3505 below the low of the last candle in the long rectangle hanging below the left of the red pill. The price shot for it after escaping the rectangle.

Note

Pivot point at the Red Pill. Trade still active, trailing stop not hit (1.3505), but the market is just right above it. We might get to see if the longer rectangle on the lower right at 1.3474 becomes resistance, at least temporary if it doesn't decisively bounce from it.

Note

Out of the position with the trailing stop just in time for NFP. Could have been a good idea to short at the red pill at the closing price of the 28th candle just in case we visit the blue pill. Another scenario would be a bounce/pivot point and a continuation of the bull move. Even so, this simulated matrix should still provide some interesting price action at the shapes in the future.

Note

There was a pivot point at the marked time stamp for 8 September. Tomorrow is the time stamp of the blue dot in case it turns out to be significant. After another potential pivot point I am waiting for another bounce or rebound from one of the rectangles to finish this Matrix out.

Note

The low from the day of the blue bill was not broken yet. Best case scenario for the bulls is to see how the price reacts at the big upper rectangle if this is another turnaround point. Looking forward to see if any Monday Gaps surprise us in a good way for this Matrix.

Note

Price touched the support rectangle from below but it is already at it's end. Not sure where another pivot point might occur. Looking forward to see what happens in the time zone of the white rectangle. Last white rectangle time zone came up with those bounces at the beginning of the matrix which became the start of a longer journey towards the red pill.

Note

Final day in the time zone of the support rectangle and it has been broken. It is the second time this pattern happens in this matrix. Last time it was the other way around when the bulls were in charge. This is clear bear territory now unless bulls get back in it. At the 1.34 level found some support leaving a candlestick shadow for it.

This matrix would be a complete success if the last rectangle turns out to be a support zone (between 1.332 and 1.3366 starting on Monday) unless it gets past that area this week and heads for the white.

Time will tell. Tomorrow is another marked date. Last 2 marked dates turned out to be pivot points but that pattern might not repeat itself the third time. First 2 marked dates were each a date of the price with a rectangle. Next 2 marked dates could be completely different.

Note

Green candle at the marked date with a candlestick shadow confirming the support at the marked price level of 1.3409. As mentioned in previous update, not sure the pattern of pivot point at the marked date repeats itself here for the third time.

Note

With the green candle from today it looks like another pivot point at the marked price level and the marked date yesterday , even if it turns out to be minor. Still some shapes left in this Matrix and another bounce or pivot point at one of them could still happen.

The initial idea is the same and is simple. Any potential pivot point which consists of two candles in opposing directions can be traded with a trade in the direction of the last candle and stop loss above/below the high/low. Trailing stop moves with the highs and lows, preferably of the longer candles in the direction of the trend.

Not all opposing pairs of candles are potential pivot points, as they should be preferably at the potential end of a wave, and not all potential pivot points are tradable. That was the purpose of the Matrix. To try and anticipate pivot points and filter out unwanted dud signals. Any coincidences between the drawing matrix and the future, could be just a coincidence, unless they are too many and too obvious. Fool's Gold, Randomness, or Mathematical Precision. One out of 4.

Note

Tomorrow is a very special day. The price could meet the small rectangle, getting ready to pierce it like the last small one that was met in this picture, or a potential pivot point near it.

Note

Candlestick shadow at the small rectangle. This doesn't look like a pivot point, but it could become one. There is a nice bearish engulfing on the 4h chart.

Note

The Matrix Hits again and we have a continuation bearish candle after the encounter with the rectangle.

Note

Bounce 8 pips away from the marked level of 1.3409. Big one. The Matrix Hits again.

Note

We had a pivot point at all 3 previous marked dates. 5 September is another one. 6 is NFP. Any surprises?

Note

Some might look at these trend lines and the potential candlestick signal at the marked date in the Matrix right below the upper edge of the rectangle thinking: "It's selling time!"

Not so fast. Tomorrow the dollar might jump because of NFP. Would you bet against that or just trust the Matrix? We had 3 turnarounds at the previous 3 marked dates. This can't the 4th. It would mean this Matrix knew the future all along. This is not possible. It would be too much.

Note

Looks like The Matrix has hit again with a pivot point at the marked date. We might be approaching 1.36484 which is a marked price level (red). Don't know if it will act as support temporary/with a rebound, or a complete drop. The Elements in this project are almost over, but I can promise for at least one more interesting event at any of the remaining items.

Note

The red line has been broken. Few elements left in this matrix for potential pivot points or temporary rebounds/candlestick shadows.
A rectangle, 2 price levels, and a marked date.

Note

Last Marked Date in this Matrix with a potential bearish engulfing. Not sure if this will turn out to be another pivot point, but this has been quite an interesting ride.

Note

Looks like a bearish day so far even though there are still plenty of hours left until the close. Another pivot point at the marked date would make this Matrix look much better. Red marked price level below. Potential support zone to be broken or to bounce from it.

Note

Bounced 13 pips away from the red marked price level.

Note

Almost out of the Matrix/...

nen

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.