Welcome to a weekly outlook on USDJPY.
Here we are going to come up with a clear picture using my personal experience with technical analysis.
I have spend countless of hours looking at charts, trying to come up with a reason for price movements. For a long time I thought, if you had the ability to forecast the markets, it would automatically turn you into a profitable trader
It took me years of effort, but I've spend all this time only to find out that I was completely wrong and have been wasting my time, since I never wanted to become a technical analyst. I wanted to be a trader.
Being able to forecast charts has absolutely nothing to do with trading. And I have happened to learn it the hard way, which was totally unnecessary in order to reach my initial goal and dreams which was becoming profitable in the markets, not by chance, but by technical analysis.
It's a fact that most technical analysts do not trade their own charts or make their money trading. They simply deliver the analysis and the trading team will make their own decisions, based on that particular analysis.
When I first heard of that, I couldn't believe what I was hearing. It just didn't make sense in my head, why would they not be able to trade their own analysis. Now I finally understand why. Because one thing is being able to analyze a chart, another thing is to trade it. Most people simply focus on trading strategies, but they are missing two of the three components there is to trading.
1: is a trading strategy, which is what everyone focuses on.
2: is a trade execution plan, knowing exactly when and why to get both in & out
3: is a risk management plan, knowing exactly which position size you are taking and how much risk you are willing to put on.
Now there are 4 ways to manage risk:
You accept
You mitigate
You eliminate
You transfer
In trading we have to first: accept the risk and then mitigate the risk.
We do this by simply keeping our position size to a maximum of 1%. By doing this we are safe if spikes would occur or if any news related event happen to go against us.
Not only do we keep our position size to 1%, we also make sure our stop loss value is equal to 1% of our capital.
We are giving ourself a 100 shots before we need to reload or deposit more money into the account.
Now by winning more then we are losing, we have basically rigged the game.
What you are looking at is a descending triangle. Typically descending triangles is a continuation pattern, which means they mostly occur in a downtrend for descending triangles and in an uptrend for ascending triangles.
When a descending triangle occurs in a uptrend it is no longer considered as a continuation pattern but as a trend reversal pattern.
Divergence also show prices rising on falling momentum, which is generally a sign that the buyers are not willing to pay higher prices for the particular asset.
Smart money is fading out.
Now I like to base my trading decisions on strong support/resistance levels. I use fibonacci retracements, extensions and projections to find these levels.
Usually I like to see a move equal to or larger then 50% projection, and look for a pullback towards 11% projections. I have found price react best to these set-up, which makes up the best low-risk high probability trading set-ups.
Thank you for reading the analysis
Dont forget to like the chart
All support appreciated and needed, please keep it coming.
God bless and happy holidays
Here we are going to come up with a clear picture using my personal experience with technical analysis.
I have spend countless of hours looking at charts, trying to come up with a reason for price movements. For a long time I thought, if you had the ability to forecast the markets, it would automatically turn you into a profitable trader
It took me years of effort, but I've spend all this time only to find out that I was completely wrong and have been wasting my time, since I never wanted to become a technical analyst. I wanted to be a trader.
Being able to forecast charts has absolutely nothing to do with trading. And I have happened to learn it the hard way, which was totally unnecessary in order to reach my initial goal and dreams which was becoming profitable in the markets, not by chance, but by technical analysis.
It's a fact that most technical analysts do not trade their own charts or make their money trading. They simply deliver the analysis and the trading team will make their own decisions, based on that particular analysis.
When I first heard of that, I couldn't believe what I was hearing. It just didn't make sense in my head, why would they not be able to trade their own analysis. Now I finally understand why. Because one thing is being able to analyze a chart, another thing is to trade it. Most people simply focus on trading strategies, but they are missing two of the three components there is to trading.
1: is a trading strategy, which is what everyone focuses on.
2: is a trade execution plan, knowing exactly when and why to get both in & out
3: is a risk management plan, knowing exactly which position size you are taking and how much risk you are willing to put on.
Now there are 4 ways to manage risk:
You accept
You mitigate
You eliminate
You transfer
In trading we have to first: accept the risk and then mitigate the risk.
We do this by simply keeping our position size to a maximum of 1%. By doing this we are safe if spikes would occur or if any news related event happen to go against us.
Not only do we keep our position size to 1%, we also make sure our stop loss value is equal to 1% of our capital.
We are giving ourself a 100 shots before we need to reload or deposit more money into the account.
Now by winning more then we are losing, we have basically rigged the game.
What you are looking at is a descending triangle. Typically descending triangles is a continuation pattern, which means they mostly occur in a downtrend for descending triangles and in an uptrend for ascending triangles.
When a descending triangle occurs in a uptrend it is no longer considered as a continuation pattern but as a trend reversal pattern.
Divergence also show prices rising on falling momentum, which is generally a sign that the buyers are not willing to pay higher prices for the particular asset.
Smart money is fading out.
Now I like to base my trading decisions on strong support/resistance levels. I use fibonacci retracements, extensions and projections to find these levels.
Usually I like to see a move equal to or larger then 50% projection, and look for a pullback towards 11% projections. I have found price react best to these set-up, which makes up the best low-risk high probability trading set-ups.
Thank you for reading the analysis
Dont forget to like the chart
All support appreciated and needed, please keep it coming.
God bless and happy holidays
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Triangle breakout formation on the hourly timeframe