Trade Example – EUR/JPY

Filed under: Learn Forex Trading |

We have two trades currently in play and both are currently in handsome profits. However, since neither of them has come to fruition as yet, I will take your through another trade example today of one that we missed.

 

Figure 1.

This particular trade comes on the EUR/JPY forex currency pair. To begin with, the daily chart shows that the pair is currently in a very powerful bull trend. The 8-day exponential moving average is crossed firmly over above the 21-day exponential moving average and we are coming off the back of six bullish candles in a row. The chart also visibly moves up from left to right for a final confirmation. So what we are looking to do in a powerful bull trend such as this is not to try to jump on to a runaway train (which is dangerous!), but rather, to casually hop on the train when it pulls temporarily to a halt.

 

Figure 2.

If you now look at Figure 2, which is the 4-hour chart for the EUR/JPY pair, you will see that the market gapped up. These kind of gaps often provide a really good area of support, so when a pin bar formed and bounced off this gap, this would have been a good area to take a long trade, with a stop loss just a few pips below the low of the pin bar, and a target of two and a half times our risk.

 

Figure 3.

Figure 3 shows that the pair moved up very nicely after this pin bar, and our target would have been nicely reached for a 2.5% rise on our bank. Unfortunately, we were not able to catch this setup. However, the good news is that there will be many more setups similar to this one to come. I will leave you with that for today – more tomorrow.

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