Hello everyone,
I guess I'll just start with a trade I placed just now...a sell on USDJPY. First of all, I mainly trade off the daily. Sometimes looking to the 4 hour chart for entry. So, anyway, looking at the last several weeks on the UJ daily, and price experienced a steep climb and was significantly pulling away from the mean, so I thought that a retracement was due - but the question was, how deep? Although I saw price stalling and failing to climb higher - I didn't see any real price action signals on the daily chart at the recent peak of price around 109.690 to get me into a counter-trend trade (unless you count the bullish power candle on the 3rd [a Friday] followed by a bearish power candle on the 6th [the following Monday] - which could have been counted as a rejection combo, but it happening over the weekend made me nervous), so I hope that I am not getting into this trade too late. What made me decide to take the trade today was a combination of reasons, the last few days' candles are closing below the mean, last week's candle was a solid bearish power candle (so, you know, momentum), and the fact that on Thursday/Friday of this past week we had a bearish inside day combo. If I had been at my computer earlier when Asian session opened - I would have set up a sell-stop to trigger to open the trade when price broke the low of the inside day candle. But I was on the road most of the day, and when I had a chance to check in, today's candle had already taken off in a bearish direction. Typically, these breakouts of inside day candles are pretty strong, so I decided that I would still place that sell order even though I am late yet again. So, my stop loss is placed at 107.737 (a little above the high of today's candle - I figure if it reverses that far than the retracement isn't going to go as deep as I thought and it's a failed trade). I think this keeps my risk at a reasonable level and gives the candle a little room to fluctuate. My target is 105.493 which is just above a swing level that occurred around the end of 2013. If I reach my target, my risk/reward ratio would be 1:3. I am getting a little nervous that this may have been a false break, since Asian session is ending and price is climbing higher, but it's done either way. So, now I will sit back and see what happens!
)
Here are the daily and weekly charts to illustrate:
[expired image link removed]
I guess I'll just start with a trade I placed just now...a sell on USDJPY. First of all, I mainly trade off the daily. Sometimes looking to the 4 hour chart for entry. So, anyway, looking at the last several weeks on the UJ daily, and price experienced a steep climb and was significantly pulling away from the mean, so I thought that a retracement was due - but the question was, how deep? Although I saw price stalling and failing to climb higher - I didn't see any real price action signals on the daily chart at the recent peak of price around 109.690 to get me into a counter-trend trade (unless you count the bullish power candle on the 3rd [a Friday] followed by a bearish power candle on the 6th [the following Monday] - which could have been counted as a rejection combo, but it happening over the weekend made me nervous), so I hope that I am not getting into this trade too late. What made me decide to take the trade today was a combination of reasons, the last few days' candles are closing below the mean, last week's candle was a solid bearish power candle (so, you know, momentum), and the fact that on Thursday/Friday of this past week we had a bearish inside day combo. If I had been at my computer earlier when Asian session opened - I would have set up a sell-stop to trigger to open the trade when price broke the low of the inside day candle. But I was on the road most of the day, and when I had a chance to check in, today's candle had already taken off in a bearish direction. Typically, these breakouts of inside day candles are pretty strong, so I decided that I would still place that sell order even though I am late yet again. So, my stop loss is placed at 107.737 (a little above the high of today's candle - I figure if it reverses that far than the retracement isn't going to go as deep as I thought and it's a failed trade). I think this keeps my risk at a reasonable level and gives the candle a little room to fluctuate. My target is 105.493 which is just above a swing level that occurred around the end of 2013. If I reach my target, my risk/reward ratio would be 1:3. I am getting a little nervous that this may have been a false break, since Asian session is ending and price is climbing higher, but it's done either way. So, now I will sit back and see what happens!
)Here are the daily and weekly charts to illustrate:
[expired image link removed]
