Bear Continues to Maul the USDJPY pair part 2
I consider myself a still "Wet behind the ears noob" when it comes to Forex trading, as I have been live trading for less than 1 year. If that scares you, then you are perfectly free to leave now. If I have not scared you off, then allow me to present my idea.
Back in Jan of this year I published and idea that said that that the USDJPY pair would drop from 110 to 105. It did and it still continues to drop. The long term trend line is holding up well. The price has broken above it a couple of times, as the bulls get the crazy idea of breaking the trend, but the bears are clearly in control, as the price drops back below the trend line and continues on it's merry way. As you can see, price has broken below the previous support level at the 104.75 area, and the next area of previous support is down around the 101.2 area. As you can see from my chart, I am already in this trade. I mean, If I'm not willing to put my own money where my fingers are typing, why should you even bother to read it, right? As you can see my stop loss is just below 106. Why such a large stop loss? The reason is that I learned from my last idea, that the USDJPY is a fairly heavily manipulated pair. Stop hunts are not an uncommon thing. I got stopped out multiple times the last time, so now, if they want to stop me out, they are going to have to work for it. I'm not saying that they can't, because, if they are large enough to move the market, then they are large enough to do it, I just don't believe that it would be worth their $ to go after my paltry stop loss. You can also see that my Take Profit is set just under 102. Why set my take profit that far above my projection? Several reasons, but mainly I'm really not all that greedy. I'm just looking to get by. And for another reason, I have seen the market get to within 2/10ths of a pip from my take profit, and then do a full on reversal and stop me out. By being more conservative, I stand a better chance of winning the trade. And for still another reason, I do not sit in front of the charts 24/7. If I catch the price approaching the 102 level, then I will take out my hard stop loss and in a trailing stop loss. If I miss it, I am perfectly happy to pick up almost 250 pips. That is a win in my book, on any day.
As always the ideas presented here are my own thoughts and ideas. They are not trading advice or recommendations of any kind, but merely me sharing my trading idea and style. If this interests you, then it is imperative that you do you own due diligence. As one of my Forex teachers is fond of saying... "It is much better to be out of a trade wishing that you were in it, than it is to be in a trade and wishing that you were out." So do your own homework, and any and all profits or losses that may be incurred as a result of your reading this idea, from a still wet behind the ears noob, is entirely your responsibility.
Comment:
The price dropped as predicted. I hope that a lot of you made plenty of pips on this one. I am starting to look for an upturn in this pair. Have we hit the bottom yet? I don't know, but I am pretty sure that if we have not, that at the very least, we are getting close, close and did I say close? Remember, pay attention to what is going on and be like Jack and his candle stick, and stay nimble in this market.