Trade Example – AUD/JPY

Filed under: Learn Forex Trading |

We have quite a few of the live trades running at the moment, most of which are in profit, but none of which have come to fruition. As a result, I will be taking you through yet another price action trade example today – and on this occasion the example comes on the AUD/JPY forex pair, which is the currency pair for the Australian dollar and the Japanese yen.


Figure 1.

Lets begin by looking at Figure 1, which shows the daily chart for the AUD/JPY pair. We can immediately see that the chart is moving nicely up from left to right, so we know that the pair is in a bull trend. We can also see that the 8-day exponential moving average is above the 21-day exponential moving average, which confirms that the trend is bullish. So what we want to be doing here is trading any price action signals on any pullbacks and riding some of that momentum. We can also see that there is a nice level of support/resistance (marked with a horizontal ride line) that price is pulling back to. This is the perfect place to watch out for any price action signals on the intraday 1-hour and 4-hour charts.


Figure 2.

If you now look at Figure 2, you will see the 1-hour chart for the AUD/JPY pair. I have highlighted a bullish engulfing pattern that occurred at our level of support/resistance, and also around the 150-hour exponential moving average, which is often a significant area. This would have been a good place to go long with a stop loss a few pips below the low of the move and a price target of three times our risk. This trade would have worked out for a nice 3% rise on our bank. Unfortunately though, it is yet another one that we missed.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>