The first chart is CNQ on the TSX and the second chart is CNQ (USA). I don't want to deal with foreign exchange in my retirement account so I'm basically sticking to a short focus list of Canadian stocks that trade on the US markets. In general, stocks that trade on the US markets are much more liquid than Cdn. stocks that don't.

The setup is a 50% Fib. retracement from the previous day low to the ORH (gaps) into the up sloping trendline. I took a partial when price retraced back to the base and I'm holding the second half of the swing overnight. My target is a gap fill at $60.00 CAD.

The day trade was executed in the same manner, except the second half was closed EOD.



Trade Management:

In my swing account I risk between 1-2% capital per trade, depending on the quality of the setup and the market conditions. I don't use hard stops especially when trading from a trendline. Price can test the trendline several times before bouncing. I want to give the trade a chance to work, so I allow for a reasonable amount of consolidation and at the same time respect the risk ratio. If I'm trading a pattern such as a flag from the daily chart, I like to let the second half run a full measured move. In the case of CNQ I have a specific target and I will exit on target or manage the trade from the trendline if it fails to move higher tomorrow. Under current market conditions, I always take a partial on day one. If the trade does not perform well after I initiate the trade, I scratch or take the loss and move on. A good setup should start to make money shortly after entry.

CNQ closed on its highs so the expectation is that will continue with strength on the open. If it gaps down tomorrow, I will look for a gap fill. If that doesn't look feasible, and the trendline is broken, I'll have to exit the trade.