Live Trade – USD/JPY

Filed under: Live Trades |

I currently have a live trade in play on the USD/JPY pair (the pair for the exchange rate between the United States dollar and the Japanese yen). This is currently in some nice profits, and I would like to talk you through this trade setup right now.

 

Figure 1.

Figure 1.

To begin with, take a good look at Figure 1. This is the daily chart for the USD/JPY pair, and it is the only chart and timeframe that we will need to look at on this particular occasion. As you can see, the pair is in a very powerful bull trend, with the 8-day exponential moving average crossed well above the 21-day exponential moving average, and this pair is visibly moving up from left to right. In this kind of trend, we want to trade on the right side of the trend and go with this momentum, so we would ideally be looking out for any price action signals that confirm the continuation of this trend.

 

You will also see that I have marked in on the chart a previous area of support/resistance (marked in with a horizontal green band). Although you cannot see why on this zoomed in chart, if you go back a few months on the chart, you will see that this was significant because it marked a previous high on the chart. Thus, price had just broken through this level, and then formed a bullish pin bar coming off of this level. When this happened, 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 of 2.5 times the risk. This order has now been filled, and is currently in profit by around a level equal to that of the risk. I will keep you updated on this trade as it progresses…

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