Live Trade – EUR/JPY

Filed under: Live Trades |

I currently have a very nice trade running on the EUR/JPY forex currency pair (the pair for the euro and the Japanese yen). Although the trade has not quite yet come to fruition, I have taken some profits, and I would like to run you through this setup right now.


Figure 1.

If you take a look at Figure 1, you will see the daily chart for the EUR/JPY pair. The main thing that I want to show you here is the upper level of support/resistance, which is marked with a thick horizontal green band. This area has been a very strong area of support/resistance in the past, so when price approached this level again and gained some bearish momentum, I was on the lookout for any price action signals.


Now, normally, when the 8-day exponential moving average is crossed above the 21-day exponential moving average like this, I would only be looking out for long trades. However, with price making a double top like this, and with the moving averages moving closer together and looking like they might cross over, I also considered short trades.


Figure 2.

If you now look at Figure 2, you will see the 4-hour chart for the same EUR/JPY pair. What you can see here is that price decisively closed through the significant area of support/resistance, and it was here that I put an order in to go short at a 50% retracement of this very bearish candle. My order was nicely filled with a pin bar before moving down once more. I had a stop loss just a few pips above the high of the bearish candle, and a target of two times my risk. When price moved to that equal to my risk, I took 70% profits and let the other 30% run. As you can see, price now seems to have reached my target, but due to the spread, it was a few pips away from closing the trade – so as yet, it is still in play. But as I took some profits, it is now a no lose trade, with a 0.4% gain locked in, with a potential 1.3% if the target is met.

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