Daniel.B
Short

Dont you just love speculation! More Speculation! haha =D

FX:GBPJPY   British Pound/Japanese Yen
821 35 12
Well most can see the reasoning for the trade just by looking at the chart. After breaking the uptrend price made an aggressive plunge down to support, which then led to an aggressive short squeeze / dip buying back up to resistance outlined by the red resistance box. Buying power became exhausted which is evident by the small bodied green candles near resistance, followed by sellers starting to re-enter the market for another possible wave down ( Which formed a clean & strong doji candlestick at resistance, which is a bearish signal).

Another very interesting factor is that the current price action seems very similar to last years price action (Outlined by the box). In which price aggressively made its way up to the 189.50 area. Followed by price violently falling back down to support (outlined by green box), which led to an aggressive short squeeze / dip buying, back up to resistance (I would say roughly between the .786 / .886 Fibonacci retracement ; outlined by the red box). The buying power started becoming exhausted once again (evidenced by the small bodied bull candles at resistance, and subsequent bearish dojis). In which price very aggressively plunged back down, slicing through support just like butter. Later finding support down at the 175.20-176.00 area, which started the next bullish wave higher.

Some notes to keep in mind:
  • Any FX traders that were trading the Yen last year, might of read that the BOJ did announce that it will begin defending the Yen against the US Dollar             around the 128.00 area (I remember not many people had read it, as it showed up in the middle of a large Wall Street Journal article; if my memory is correct). And price is near that area when in concern to U/J.
  • Also, Pound pairs do have very impressive bull runs. But that also leads to pretty impressive pullbacks in currencies paired with the pound. Catching a lot of people buying the tops in these bull runs, which also adds to the violent drops due to buyers getting stops triggered left and right. The same goes for sellers getting short squeezed, by volatile bull runs.

The Trade:
  • Short 2 Lots
  • 2nd Target is near previous support (I prefer not to place the 2nd target exactly at prior support/resistance because many times price will get near it only to reverse without the 2nd targets getting executed).
  • Stops are slightly above resistance to account for any volatility / stop hunts. Upon reaching the 1st target, they will be moved to break even.

A more conservative trade:
  • Wait for price to fall close below the lower wick of the doji (192.85)on a 4HR Chart
  • Then move down to a 1HR chart wait for a retracement to the 192.85 area and go short upon receiving bearish price action confirmation.
  • I can't tell you where to place your stops, as they would have to be based on the current price action if this scenario plays out.

Cheers, good luck to all! =)
ddp922
2 years ago
Good luck, but that doesnt look like a doji at all to me. Doji's shouldn't really have a body. I do feel we are in for a small correction still, but I think a lot of bears will be be disappointed with the outcome. GJ is still in bull mode
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Daniel.B ddp922
2 years ago
Actually they can have bodies, if Doji's didn't have any bodies then the odds of finding one in the market is near zero. Anyhow, best of luck.
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GcNaif MOD
2 years ago
good one Dan , even i m at the shorter side of it. lets see
+1 Reply
GcNaif MOD
2 years ago
thats a good observation in those boxes
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Daniel.B GcNaif
2 years ago
Thanks for the kind comments man! Yea it's interesting to see price action forming similarly to last years PA! Good luck bro =)
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moneymaking
2 years ago
Very Impressive comparison mate, Job well done. All the BEST to you :)
+1 Reply
Daniel.B moneymaking
2 years ago
As always thanks for kind comments man! All the best to you also! =)
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DerekUweri71
2 years ago
Hi Daniel, you've given a strong argument for a short and it's hard to contest. There's been a break of the bullish TL and price may want to test the TL before selling off. The doji on the daily chart could signify a short but the 4H price action is not clear but could be a bear flag.
Just a thought. 1. Is that an inverted head and shoulders on the 4 H? 2. On the Weekly chart, there's a Hammer and last weeks bull candle, could this be signalling further bullishness to come?
+1 Reply
Daniel.B DerekUweri71
2 years ago
Thanks for the kind comment Derek! And good questions, and yes that can be an inverted H/S on the 4HR chart but from my experience H/S patterns aren't to accurate (For the most part H/S patterns get invalidated after forming. That's just my experience with them, so my advice is to use your own discretion when it comes to Head & Shoulder patterns because I can always be wrong hehe). I don't really see a bear flag on the 4HR chart, but a possibility can be a price action range forming at resistance before price decides to drop... GBP/JPY tends to do that before starting a pullback / drop or bull run. In this case the potential range favors sellers IMO. And yea I took notice of the Weekly hammer formed along with the bull candle, but I'm not really paying to much attention to it, since the hammer formed right at resistance it runs the odds of becoming invalidated very quickly. But it is a very valid reason to be cautious when considering your position sizing, and reasoning to take the trade, you made a very valid case for further bullishness with that. So take that into consideration if your debating on whether to take the trade or not. Appreciate your questions bro, best of luck for the upcoming week of trading! =)
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lzd7991
2 years ago
Good Luck Dan.
+1 Reply
Daniel.B lzd7991
2 years ago
Thank you! Best of luck to you also! =)
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Daniel.B
2 years ago
Update: I put "A more conservative trade" in the description of the analysis, for more conservative traders. =)
+1 Reply
I have shorted due to similar reasons too. Good luck.
+1 Reply
Daniel.B PriceActionTrading
2 years ago
Nice bro, best of luck! =)
+1 Reply
P_Parker
2 years ago
Agree und good Luck Daniel :-)
snapshot
+1 Reply
Daniel.B P_Parker
2 years ago
Nice bro! Best of luck to you also! =)
+1 Reply
DerekUweri71 P_Parker
2 years ago
Hi P Parker, how do I get to insert a graph like you have here ?
I've taken a snapshot of my chart but I'm unable to copy paste in this text box.
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P_Parker DerekUweri71
2 years ago
Click in the top right corner of the textbox (insert chart), there you have to paste the snapshot image url :-)
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DerekUweri71 P_Parker
2 years ago
Thanks P_Parker, I'll give it a try later. Maybe it's because I was trying from my ipad or perhaps it's the internet.... I don't know.
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DerekUweri71
2 years ago

snapshot
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DerekUweri71 DerekUweri71
2 years ago
snapshot
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PriceActionTrading DerekUweri71
2 years ago
After you click reply. A comment box will appear, for obvious reason. At the top right of the comment box you will see a insert chart option. The picture of that option is something like a 3 wave pattern. An ABCD pattern if you will.
+2 Reply
DerekUweri71 PriceActionTrading
2 years ago
Thanks PriceActionTrading, I'll give it a try later. It might have something to do with it not working from my ipad, i don't know.
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moneymaking
2 years ago
Market came back to the entry point, good level to enter if anyone haven't, including me, LOL :)
+1 Reply
Daniel.B moneymaking
2 years ago
Lol I already entered on Monday =D Not to happy with the position since its flat again, but we'll see how it goes. =)
+1 Reply
moneymaking Daniel.B
2 years ago
US DOLLAR seems to be getting weaker at least for short term, which is what we need :)
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moneymaking Daniel.B
2 years ago
My bad. I thought this was USDJPY, ooops, LOL :)
+1 Reply
TahirAli moneymaking
2 years ago
Hi moneymaking.I am already long in USDJPY with 33 pips profit until now.I hope to get at least 80 pips out of this trade.Lets see.
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Andyle TahirAli
2 years ago
UJ completed 61.8% retracement now and gonna be down. Pin now on 1H. U should set ur SL at BE for risk free.
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moneymaking TahirAli
2 years ago
Awesome Tahir. Do look for signs of reversal. Better to actively manage your position on USDJPY. All the BEST :)
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Daniel.B moneymaking
2 years ago
Haha its all good bro, I was wondering why you mentioned the dollar =D
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moneymaking Daniel.B
2 years ago
HEHE :)
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moneymaking Daniel.B
2 years ago
I actually entered short in USDJPY. let's see how it goes.
+1 Reply
Andyle moneymaking
2 years ago
Nice mate, I added more just now. Sell heavily on this pair.
+1 Reply
moneymaking Andyle
2 years ago
Hey Andyle, sounds good. All the best to you :)
+1 Reply
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