Trade Example – CAD/JPY

Filed under: Learn Forex Trading |


Our live trade did reach a conclusion yesterday for a 1% loss. It was not a very interesting trade setup or result (very straightforward), so instead I would like to take you through another trade setup that we missed that is a little more interesting – this time on the CAD/JPY forex currency pair, which is the pair for the Canadian dollar and the Japanese yen.


Figure 1.

Let’s begin by taking a look at Figure 1, which is the daily chart for the CAD/JPY pair. Even a beginner can see that this pair is in a very obvious bull trend, with the 8-day exponential moving average crossed firmly above the 21-day exponential moving average, and the chart visibly moving up from left to right at around a forty-five degree angle. There are also many more white bull candles than there are black bear candles.


Figure 2.

Figure 2 shows the 1-hour chart for the same CAD/JPY pair. What you can see here is that price has bounced off the 150-hour exponential moving average for the second time and has formed a nice pin bar (highlighted in yellow). This would have been a good time to put an order in at the break of the pin bar, with a stop loss just a few pips below the low of the move and with a target of around two and a half times our risk. As you can see from Figure 2, this trade would have been successful for a 2.5% rise on our bank. The 150-hour exponential moving average is often respected, so when we see a price action signal bouncing off it in the direction of the broader trend, then we would be wise to try to hop onto that trend. Well, that’s it for today – and I’ll be back with more tomorrow.

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