Strategy preconditions GBPJPY has recently reached a 1W resistance level at 208.019 followed by immediate strong downward push, broke several liquidity levels at once, and now it starts slowly pulling back up a bit. Before making your analysis on 1D chart, please take a look at the 1W chart and mark important levels.
In order to take Short trades, we need the local trend to also start to reverse to trending downwards as the recent big downward push, and we need a downward Break of Structure(BOS) confirmation signal in prior to Short. There are 2 scenarios this can happen, drawn on 1D Chart. Do we care about which one is more likely to happen than another? No, we do NOT care at all, because all we do is to wait for the downward confirmation to form, only then we will start seeking Short entry point in LTF as 1H, 15min etc. We only act on what the market gives us and we don't guess or gamble.
SL can be set above your entry area which might be formed later, a more conservative SL can be set above the "Caution level" marked on the chart. There are several TP levels you can use. The safest one is at 180.102, a more reasonable one is at the "Weekly OB" area, and the most greedy one at 149.048 which is a clear target level in 1W chart.
Cautions If the "Caution level" is broken before our desired downward BOS is formed, we must abandon this Short idea, because I'll have no clue about what's gonna happen next, it will probably trend upwards then. I will change my analysis at that time.
The desired downward BOS shall not necessarily be seen at 1D Chart, can be found at 4H, 1H or even 15min chart.
Right now it is hard to trade based on 1D chart, if you want to take some short-term LONG trades, where to set reasonable SL? I recommend not to do anything right now, because the ranging movement has probably begun.
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