Whether we will hit the target at 105. im not sure, the starting data has been mixed.
Whilst we ticked lower 40 pips which was a good sign, we quickly pulled back all of them and $yen is now trading 50 pips up from the lows - with the candle looking e.g. there is a large gap between open and lows, and the close is virtually trading on the highs meaning UJ MAY be looking to push higher now.
- Although this "premarket" analysis may be premature as liquidity is thin and the "bullish" start MAY just be noise OR some bears taking profit ASAP incase there is a big recovery higher shortly.
My ideal entry buy limits are at 105.5 (see previous article), but im cautious about potentially missing a good trade if we dont actually get to the "ideal" level.
The potential upside even from the less ideal price at the moment of 106.7 is at least 200-250pips.
However, this UJ entry reminds me of a fundamental trading lesson - discipline!
The trade was to buy once support is tested/ failed, buying after such event is much more warranted (versus buying NOW and being impatient) for several reasons:
1. if we test 105 and fail, the buyside momentum will be much more aggressive than simply buying now as bears are stopped out of their shorts, a long squeeze will occur - hitting their stops causing the market to trade bid.
2. Furthermore, there will be greater market demand in general for LONG UJ positions as more capital witnesses the level fail, thus BUYING would be the only way to look at UJ.
3. Finally, waiting for a 105 level will likely mean that the London session will be starting soon, thus the biggest spot trading FX institutions will also be adding buyside pressure.
- why are these points important to wait for vs buying now? All of these elements together mean the UJ market will experience huge UPSIDE momentum, thus reducing downside risk and the potential trade length (time), whilst also maximising profits e.g. by entering at 105.8 is another 100 pips profit vs entering now.
Finally by entering the trade with the game plan it means - we have stuck to what we planned, if we stick to our plans it means uncertainty = 0. Messy/ impulse entry's = unnecessary risk and >0 uncertainty.
The reason i decided to post this was just a reminder for myself and everyone else to stay disciplined and trade your strategy!