GBPJPY - Long - Daily Chart - MACD Continuation Trade
Entering on a bullish MACD cross while ABOVE zero-line , signaling bullish continuation.
Note that I use MACD ONLY for continuation and do not attempt to find reversals using the MACD as I do not find it to be very accurate in FX
Trade is on the daily timeframe and has a 1 ATR stoploss (148 pips), 1ATR target 1 where I take 50% of my position off and move stop to breakeven, then I use a trailing stop following the other 50% of my position setting my stop at the low of each subsequent daily candle that continues higher. These trades can take many days to play out and I often hold over the weekends, do not take this trade if you struggle to control your risk or are uncomfortable holding for weeks at a time.
I expect this setup to go against me over the next few days as this was already a strong move up and may need to cool off for a day or 2, I expect to hit profit targets sometime next week but don't trade based on time.
It is also important to note that I normally allocate up to 1.5% account risk on continuation trades however I do not risk over 1% when I trade GBP (due to the fundamentals around Brexit). A similar trade to this could also be expressed by shorting EURGBP although that pair has not made a signal on the indicators yet and is most dramatically news driven.
The historical probability of MACD continuations on the top 20 fx pairs (with my 1ATR parameters) is around 68%, please perform your own backtesting of this strategy as you can achieve higher or lower probability results using different stop losses and profit targets.
Best of luck traders.
Note that I use MACD ONLY for continuation and do not attempt to find reversals using the MACD as I do not find it to be very accurate in FX
Trade is on the daily timeframe and has a 1 ATR stoploss (148 pips), 1ATR target 1 where I take 50% of my position off and move stop to breakeven, then I use a trailing stop following the other 50% of my position setting my stop at the low of each subsequent daily candle that continues higher. These trades can take many days to play out and I often hold over the weekends, do not take this trade if you struggle to control your risk or are uncomfortable holding for weeks at a time.
I expect this setup to go against me over the next few days as this was already a strong move up and may need to cool off for a day or 2, I expect to hit profit targets sometime next week but don't trade based on time.
It is also important to note that I normally allocate up to 1.5% account risk on continuation trades however I do not risk over 1% when I trade GBP (due to the fundamentals around Brexit). A similar trade to this could also be expressed by shorting EURGBP although that pair has not made a signal on the indicators yet and is most dramatically news driven.
The historical probability of MACD continuations on the top 20 fx pairs (with my 1ATR parameters) is around 68%, please perform your own backtesting of this strategy as you can achieve higher or lower probability results using different stop losses and profit targets.
Best of luck traders.
Comment:
Pulled back into the entry zone as expected, fully filled, now we wait to hit targets or be stopped. With all of the fundamental news around the GBP no need to think we can out-smart the market. Will just let the trade play out mechanically
Trade active:
Price fell just shy of T1 today, I'm not pulling my target down as I still expect to hit it. However I have moved my stop to breakeven on this trade.
Comment:
Update: Moved my SL to today's low, locking in that profit!
Trade closed: target reached:
I have closed my full position both targets hit, as we approach this potential level of resistance (high volume area). Now, if there is positive fundamental Brexit news, do not be surprised to see this resistance become support in the future, meaning some profits "could" have been left on the table. But for MY methodology this has been a perfect execution, in no way shape or form am I considering fading the market, GBP still is showing a ton of strength, however my targets have been hit and now I am on to other pairs.
Goodluck Traders.
Goodluck Traders.