Live Trade – AUD/JPY

Filed under: Live Trades |

 

I had a nice, successful trade on the AUD/JPY pair yesterday, and I would to discuss the ins and outs of this simple trade setup right now.

 

Figure 1.

Figure 1.

To begin with, take a good looked at Figure 1. This is the daily chart for the AUD/JPY pair, which for those of you that don’t know, is a minor pair and the exchange rate for the Australian dollar and the Japanese yen. Although we sometimes look at both daily charts and intraday charts when making trading decisions, on this occasion, the daily chart is the only timeframe that we will be looking at as all of the information that we require is located in this chart.

 

As you can see from Figure 1, this pair is in an extremely powerful bull trend. The chart is visibly moving up from left to right at almost a forty-five degree angle, and the 8-day exponential moving average is crossed well above the 21-day exponential moving average, and it has been for a long time. If anything, these moving averages are also moving even further apart.

 

I have marked in what was the previous high on the chart (marked with a horizontal green band), and this is a level of support/resistance that we were hoping to utilize. So, when price came back down to this level, I was on the lookout for any bullish price action signals that would tip us off to the fact that the pair has taken a breather, and that the trend is about to resume.

 

A very nice pin bar formed right at this level, and it was here that I put an order in to go long at a 50% retracement of the pin bar, with a stop loss placed just a few pips below the low of the pin bar, and a target set of two times the risk. As you can see, this order was filled, and the trade was successful. More tomorrow…

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