Trade Example – AUD/JPY

Filed under: Learn Forex Trading |

We currently have just one trade active on the NZD/USD pair, which is going nicely and is in profit. However, since I have no actual results to tell you about today, I am instead going to run through a trade that we didn’t take.

 

The trade in question came on the AUD/JPY forex currency pair, which is the pair for the Australian dollar and the Japanese yen. I did not take this trade because I had taken a trade on the GBP/JPY pair, and the two are quite closely connected and I did not want to double my risk. It was a very similar setup that we had on the GBP/JPY trade, and I will run you through the ins and outs of the trade right now.

 

Figure 1.

If you take a look at Figure 1, you will see the 4-hour chart for the AUD/JPY pair. You will see that the pair was moving up nicely before pulling back to an area of support. This had acted as a strong support level on two recent occasions, so when an inside bar was followed by a pin bar ‘fakey’ setup, this was a good opportunity to set an order to go long at the break of the mother candle of the inside bar, with a stop loss just a few pips below the low of the move and a target of two and a half times our risk.

 

Figure 2.

If you look at Figure 2, you will see that price moved up very nicely after this and our target would have been safely met for a nice 2.5% rise on our bank. As I said though, this trade was very similar to the trade that we took on the GBP/JPY pair, and I did not want to be over-exposed if the trade moved against us. That’s it for today – more tomorrow.

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