Jumping On Yen Weakness

My free Forex setups that I post every week are to help traders learn how to trade.  It’s that simple.  Making the pips you make is a bonus but understand that my main goal is to provide you with free education.

Trading is never perfect and there will be times that the setups don’t go as expected.

That’s fine.  That’s the business. 

You can often times, depending on the failure of the setup, take a shot in the other direction.  That is reserved for more experienced traders who can read price action with a little more clarity.

Why do I do this work for you?  Paying it forward.  

I want to teach you to fish so in any part of the world and at any time you choose, you can fire up your charts and make money – on your own.

I don’t post every trade setup that I look at nor do I take every setup that I post.  If you are not considering overall portfolio risk or being too side on the strength/weakness of one currency, you are asking for trouble.

Two that I want you to learn from are shorts I am holding on GBPJPY and EURJPY that were not posted in the setup section.

TRADES

2018-05-25_10-53-26 – Screen capture date and time

 

Forex Trades Thought Process

This short on the GBPJPY was using a previous rally measurement as noted by the first blue arrow.  I projected that from the low (the second arrow) and that gave me a rough idea of how far a pullback should go before running into trouble.

GBPJPY

GBPJPY

One price hit the zone, notice there was no follow through in price to the upside.  Dropping to our usual lower time frame chart of four hours, the weakness was obvious.

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The entry was using a breakout on the four hour chart to get in on the pullback prior to the daily chart breaking the low before the rally.  This allows momentum to quickly carry the trade into profit if it works out.

This EURJPY chart was a pullback after a big fall in price.  The oversold condition can work itself off via price – the pullback, or via time – the consolidation.

EURJPY

EURJPY

The green circle shows a price rejection but that gives information.  That information to me in this context was the buyers were not strong enough to continue the move upwards.

The faint grey line is from the four hour chart and represents an inner support zone.  That is where I kept alerts on to see what price action looked like when the breakout occurred on the four hour chart.

Again, using lower time frame breakouts to catch the momentum on the higher time frame pullback and continuation.

 

Trades Are Never Perfect

Could I have used even lower time frames for a better entry price?  Maybe, but where does it end?  Trading rules will save you from doing something stupid and if you don’t have rules you consistently use, you will eventually fail.

At the end, your position size or how much you make per pip can often determine how much you trade.  Low funded account holders often trade more often because the position sizing is too small.

Large account holders can hold out for the best setups and triggers because each pip is significant in both profit and loss.  If you think about it – if you had these two positions as an example at an average of $5 pip, that is $2500.  More than some people make in a month!

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Trade smart and watch your risk!

 

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