Live Trade – GBP/JPY

Filed under: Live Trades |

I currently have a live trade order on the GBP/JPY forex currency pair (which for those of you that don’t know, is the exchange rate between the British pound and the Japanese yen), and I would like to talk you through this rather simple setup right now.

 

Figure 1.

Figure 1.

To begin with, take a good look at Figure 1. This is the daily chart for the GBP/JPY pair. What you can see here is that this pair is in a very powerful bull trend (and it has been for quite some time – going back even further than you can see on this chart), with the 8-day exponential moving average crossed well above the 21-day exponential moving average, and the chart visibly moving up from left to right. Therefore, in this kind of strong bull trend, we are better off only considering trades to the long side.

 

What you can see on the chart is that price formed a very nicely defined bullish pin bar yesterday, and this also came at a level of support/resistance (marked in on the chart with a horizontal red line). 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 below the low of the pin bar, and no target set at all intending to manage the trade as we go. I have tested a lot of pin bar setups in strong trends like this on Forex Tester, and in the long run, there is a very good edge and outcome. Therefore, in the big picture, this is a trade very much worth taking – but of course, as a single trade, it could go either way – and may in fact be only a 50-50 shot, with most of the edge coming from a positive risk-reward scenario.

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