USD/JPY Setup last night using the Wave
I had 2 profitable trades yesterday using a lot of what I learned this weekend during the webinars. Click the thumbnail below for a larger view of the chart:
; "USD/JPY setup raghee")
Here are the simple questions I asked myself before entering the trade:
1. Why should I enter this trade?
Look at the price above the up arrow on the chart. It breaks through the Upper level of "The Wave" (High 34 EMA) and breaks through the 38.2% fibonacci. Look at the momentum using the MACD. Is it above 0? Yes, go long at 121.02
2. Where should I set my stop?
Set it up right below the Lower level of "The Wave" (Low 34 EMA)
3. Where should I set my limit?
I chose a couple of pips below the 78.6% fibonacci level which isn’t pictured here. Since the 50% level was close to my entry point, I decided to skip over that level and go with the 786 level at 121.23.
I made a 21 pip profit on this trade using the 1 hour charts. It turns out that the most important part of this trade was the setting of the limit. I did not set the limit AT the 78.6% fibonacci level. I set it a couple of pips under. If you see the high for the evening, it was 1 pip above my exit at 121.24. I could have easily missed my limit level, so it was very important that my limit was set where it was or I would have lost my profit and more.
Trades don’t always work out this way and I’m learning more and more to be discipline. Overall, my Profit/Loss is in the red but as I learn, it gets less and less. The important thing is to answer the 3 questions above before entering a trade. I used to blindly enter a trade and set my stops and limits wherever I wanted to. I used to think that the price was just going to come to me. This isn’t going to happen most of the time so you have to be smart and use good judgement.
Good luck!
right triangle formation EUR/USD hourly
I’ve spotted a right triangle formation forming in the EUR/USD hourly charts as evidenced by this:
The purple lines are the high/low/close 34 EMA. The trend is mildly up but not enough to look for a swing trade. I’ll be looking for a momentum trade and for the USD to push the EURO down below 1.1750.
Have a plan and stick to it
I had a plan last night and I stuck to it. According to the 34 EMA, the USD/JPY was trending up so I was looking for a swing trade. The Yen did bounce off the resistance line and I entered a 1 short position at 119.48 (currently up 55 pips). I opened another position when the pair declined to 119.20 (currently up 28 pips)
From my studies last night, my first profit target is 118.76 which the pair is approaching. It currently trades at 118.87. If it breaches this level, I’ll look for the pair to retrace to the 38.2% fibonacci level at 117.32.
Forex Dollar
I’m sticking with the dollar versus the euro and went short on the pair again at 1.789. It is trading at 1.1761.
I was reading an interview with a trader who says that some reliable signals come from using the EMA(10) and EMA(20) crossovers for buy/sell opportunities. I think I remember him saying he uses it with hourly charts.
I added the EMA(10) and EMA(20) to my EUR/USD charts and I looked at the hourlies for the last 40 days and some of the signals from the crossovers have been in advance of a significant move.
Another FX Traders Point of View
Until I can add a feature that shows a unique identity for a poster without requiring registration, I am posting a message from an unknown forex trader. It’s very interesting to hear comments and trading strategies. I hope the poster doesn’t mind…
"Comparative USD$ long positioning has yet to reach levels which historically attract contrarian trades. The CoT figures, plotted and viewed as a chart are quite revealing … viz, shorts.
I use a basic chart without chart studies bar MA’s and fib’s. I prefer a 180 min chart to the dealer 240 min, holding positrons for days and even weeks. I follow price action, I completely understand trend, I hold tight on a tree shake and build positions gradually. I’m always aware to the reasons I took the trade in the first place but alert to change. These are my (not so technical) technicals 
I carry trade most of the time so I tend to look to the high yielders – NZD-AUD-USD-GBP/JPY – although I do take the occasional day trade through a sub account when it’s choppy (not for the faint hearted). "
Since reading this, I’ve actually started looking at the 3 hour charts and really like what I see. There isn’t major price action as in hourly charts and there isn’t minimal movement as with daily charts.
Yen retracing
I’m continuing to watch the retrace of the Yen today and my strategy below may still be a good play.
I’m watching the Yen retrace and will buy when the time is right. I’m looking at hourly Moving Averages as support levels:
The Black line is the SMA(20) and is 115.48.
The Red line is the SMA(30) and is 115.27.
If the pair hits support at one of these levels, I’ll probably initiate a long position.
I’m projecting the pair to retrace to 115.17 before heading back up to 116.50.
Recommended Moving Averages
I want everyone that visits this “project” to know that this is a
learning platform for you and I. Everything that’s posted here
is done so because I feel like you can learn from what foreign
exchange information I come across. I also believe that learning
from my mistakes is also very beneficial. I want everyone to feel
free to comment on any or all posts. I will be adding a feature
in the coming days so that you too can post information you may also
feel beneficial to the “project.”
With that said, I’m currently
reading a book “Technical Analysis Explained” by Martin Pring.
This is by far the best book I have read on technical analysis.
