Trade Example – CAD/JPY

Filed under: Learn Forex Trading |


We still currently have two live trades in the market, and both are doing well and are in profits. The gold trade has now locked in around 0.8% profit with the trailing stop slowly moving up, and the AUD/JPY trade has yet to move to breakeven, but it is currently in profit by around 0.75%. Therefore, in absence of any final trade results, I will once again run you through a trade example of one that we missed.


Figure 1.

If you first look at Figure 1, you will see the daily chart for the CAD/JPY forex currency pair, which is the pair for the Canadian dollar and the Japanese yen. As you can instantly see, the chart is visibly in an up-trend with the chart rising from left to right. This bull trend is confirmed via our technical indicators, as the 8-day EMA is crossed firmly above the 21-day EMA, and it has been for some time. Therefore, we only really want to be taking long trades in this market, so we should be looking out for any price action signals when the market rotates lower.


Figure 2.

Figure 2 shows the 1-hour chart for the same CAD/JPY pair. What we see here is a rotation lower and a bullish engulfing pattern near the 150-hour EMA. There is also a significant area of support/resistance at this level too on the 1-hour chart, so there is a good deal of confluence here. We could have put an order in at a 50% retracement of the bullish candle, with a stop loss placed just a few pips below the low of the move, and a target of two and a half times our risk. Figure 3 shows that this trade would have been successful. Hopefully, we can catch more of this kind of trade next month.

Figure 3.

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