Trade Example- AUD/JPY

Filed under: Learn Forex Trading |

I had a few more orders left unfilled again yesterday, as once again, price moved off in the anticipated direction without any retracement. There was one possible trade setup that I didn’t take because I felt that it was weaker than the ones that I had chosen, but ironically, this order would have been filled and would have been successful.

The trade in question came on the AUD/JPY forex currency pair, which for those of you that don’t know is the pair for the Australian dollar and the Japanese yen.  If you take a look at Figure 1, you will see the 4-hour chart for this pair. I have highlighted the candle that is of most interest to us, this being a pin bar that followed another pin bar. This came at a very decent level of support/resistance (which I have marked with a thin red horizontal line). The fact that one pin bar was followed by another pin bar also made this a reasonably strong setup. If we had put an order in at the second pin bar to go long at a 50% retracement of the pin bar, our order would have been filled. Our stop loss would have been placed just a few pips below the low of the pin bar, and our target would have been two times our risk. As you can see, the order would have been filled on this occasion, and the target would have been met for a 2% rise on the bank.

 

If this setup had been on the daily chart, I probably would have put the order in. But as it was on the 4-hour chart, a timeframe where levels of support and resistance are not as reliable, I chose to leave this one alone. What we need to do now is be patient and wait for another good opportunity.

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