USDJPY: The Perfect Trade and Pattern You Can Use
Let me show you the perfect trade based on a trend reversal signal.
I wrote about a possible sell opportunity in this market in the previous post. I used the daily chart and explained why the market would be able to bounce from a new resistance. You can read details in the post from the related ideas.
The daily chart gave us a sell signal, but the better entry point we could get in the 1H chart. The market gave us a trend reversal signal based on the bearish divergence. We got the reversal signal at the resistance, and it was a very important bearish signal. Also, RSI and MACD supported the price reversal and further downward movement. When the price broke the local uptrend line, we got a sell signal. Stop orders had to be placed above the local swing highs. Based on the daily chart, the market had room for downward movement to the nearest strong support at 110.00 level. This support we could use as the profit target. As a result, we got a trade the amazing risk/reward ratio like 1:5.2, and the market reached the target.
Why did I decide to write about this trade?
If you read my posts carefully, you can see that I use the same patterns again and again. I like trades based on divergences and they are the same in different markets and timeframes. What does it mean? It means that if you study this example, you will be able to search for trade opportunities by yourself and open the right trades in the right market conditions and in the right time.
It is simple:
- the price reached resistance/support zone
- the price diverges with RSI/Stochastic/MACD histogram/MACD lines
- wait for a breakout below the local uptrend line for sell trades and above the local downtrend line for buy trades
- place stop orders above/below resistance/support and the local swing highs/lows
- use SMAs and nearest resistance/support zones for profit targets.
- use the proper money management!
What do you think about such a pattern? Do you like it?
If you think this post is helpful, please support it by your LIKEs!
Disclaimer!
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
I wrote about a possible sell opportunity in this market in the previous post. I used the daily chart and explained why the market would be able to bounce from a new resistance. You can read details in the post from the related ideas.
The daily chart gave us a sell signal, but the better entry point we could get in the 1H chart. The market gave us a trend reversal signal based on the bearish divergence. We got the reversal signal at the resistance, and it was a very important bearish signal. Also, RSI and MACD supported the price reversal and further downward movement. When the price broke the local uptrend line, we got a sell signal. Stop orders had to be placed above the local swing highs. Based on the daily chart, the market had room for downward movement to the nearest strong support at 110.00 level. This support we could use as the profit target. As a result, we got a trade the amazing risk/reward ratio like 1:5.2, and the market reached the target.
Why did I decide to write about this trade?
If you read my posts carefully, you can see that I use the same patterns again and again. I like trades based on divergences and they are the same in different markets and timeframes. What does it mean? It means that if you study this example, you will be able to search for trade opportunities by yourself and open the right trades in the right market conditions and in the right time.
It is simple:
- the price reached resistance/support zone
- the price diverges with RSI/Stochastic/MACD histogram/MACD lines
- wait for a breakout below the local uptrend line for sell trades and above the local downtrend line for buy trades
- place stop orders above/below resistance/support and the local swing highs/lows
- use SMAs and nearest resistance/support zones for profit targets.
- use the proper money management!
What do you think about such a pattern? Do you like it?
If you think this post is helpful, please support it by your LIKEs!
Disclaimer!
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
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