Trade Example – EUR/JPY

Filed under: Learn Forex Trading |

Here’s a trade that I didn’t take today on the EUR/JPY pair, and it is one that I certainly should have taken but I missed for one reason or another.

 

Figure 1.

To begin with, take a good look at Figure 1, which is the daily chart for the EUR/JPY forex currency pair (which for those of your that don’t know, is the pair for the euro and the Japanese yen). As you can see, this pair is quite bullish at the moment, with the 8-day exponential moving average crossed well above the 21-day exponential moving average, and with the two moving averages seeming to move even further apart, demonstrating the strength and momentum of this move.

 

The recent high has been broken, which I have marked in on the chart (with a horizontal green band) as a significant area of support/resistance. So, when price formed a bullish pin bar that penetrated through this level, and rejected it, this would have been a good time to put an order in to go long at a 50% retracement of this pin bar, with a stop loss placed just a few pips below the low of the pin bar, and a target of two times the risk. As you can see, this order would have just about been filled had you put it in early enough at the close of the pin bar (which I could not do unfortunately), and the target would have been met in just one day for a very nice 2% rise on the bank.

 

Sometimes we miss trades that we would have liked to be in on. On this occasion, I just put my order in a little bit too late, and as such, I will give myself a grade B this month as I haven’t been quite as organized as I perhaps should be.

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