Hey guys, the USDJPY chart just completed an ABCD pattern on the daily chart.
It is also resting nicely on the 200ma.
This is how I will trade it going into next week.
Trade Identification
ABCD Pattern has completed at around 108.40
Trade Execution
There are 2 ways we can trade this.
1. Wait for retest of 108.40. Trading this way will give you a better risk to reward, but your patience might be tested. I will enter only when price retest 108.40, after the first green candle close. I want the volume to be average or low when the green candle closes.
2. Wait for breakout of the downsloping trendline. This is a way where we ride the momentum of the trade and enter on the breakout. Profits can come almost immediately after execution. At the breakout candle, price should be above average but not excessive(Black).
1. Why you want the volume to be average or low when the green candle close?
2. At last sentence, I think you mean volume should be above average instead of price?
TerryHarmonicTrading
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@naiveme, sorry for the late reply.
I am currently reading this book by Tom Williams, it is called Master the markets. After the retest, if price goes higher with little volume, it likely means that lots of sellers have sold and buyers can buy it up easily. At the 2nd sentence, yes I mean volume should be above average.