Cashing in on Chaos: A Short USD/JPY Breakout Sell-Stop Trade"
Dear Tradingview family,
Symbol: #USDJPY
Strategy: #Breakout_sell_Stop Trade.
Trade Call Type: #Short.
Indicators: #Price_Action. #Chart_patterns, #Head_and_shoulders Bearish breakout. #RSI_Divergence. RichTL
Entry: Short when price breaks below the neckline of weekly H&S Pattern, Weekly Support line and Weekly Trendline.
Anchor Time Frame Weekly
Trading Time Frame: Daily.
Entry Price: 126.701
Stop Loss: 138.469
Take Profit 1: 112.960
Take Profit 2: 100.426
Take Profit 3: 1.10239
Risk Reward Ratio TP1: 1: 1.7
TP2: 1: 2.17
Methodology
As an accomplished and highly knowledgeable forex expert with extensive experience in trading various financial instruments, including crypto and stocks, I shall employ a meticulous methodology that entails a comprehensive examination of the price action and critical levels, while utilizing a blend of indicators and chart patterns. My approach shall involve seeking out promising trendlines, as well as support and resistance levels that may present opportunities for price reversal, with the aid of our indicators that will serve to substantiate the reliability of our analysis. Once I have completed my assessment, I will ascertain the optimal entry and exit points for our trades, in addition to determining the most suitable stop loss level that will enable us to prudently manage risk.
Analysis
My analysis of the USD JPY chart reveals a clear Head and Shoulders pattern on the weekly timeframe, supported by a bearish divergence seen on the RSI indicator from the left shoulder to the head price. Despite the price struggling on a daily support line, there are no strong indications from the daily and weekly RSI to suggest a breakdown of this support at this time. I anticipate that the price may rise to encounter resistance in order to expand the width of the right shoulder and create a double top pattern prior to breaking the current support level.
Once the support level is breached, the next move will be to proceed with a breakout of the Head and Shoulders pattern, which may potentially lead to a breach of the next strong weekly support and weekly trendline that has been in effect since December 2020. My sell stop entry will be executed once this breakout occurs, following the conclusion of the ongoing tug-of-war between the bulls and bears. This entry will be akin to a smooth descent, much like jumping down from a waterfall.
Conclusion:
Drawing from our analysis, I have identified a viable opportunity for a short trade. My take profit targets are situated at key support levels on the chart, namely S1 and S3. The RRR at S1 is 1:1.7, while S3 offers a more balanced risk to reward ratio of 1:2.17. My strategy will entail securing partial profit at R1 before trailing the stop loss to the entry point.
Overall, I am optimistic about the success prospects of this setup based on our technical analysis. However, it is imperative to remain vigilant and closely monitor the price action to make any necessary trade adjustments in response to new information that may emerge.
Symbol: #USDJPY
Strategy: #Breakout_sell_Stop Trade.
Trade Call Type: #Short.
Indicators: #Price_Action. #Chart_patterns, #Head_and_shoulders Bearish breakout. #RSI_Divergence. RichTL
Entry: Short when price breaks below the neckline of weekly H&S Pattern, Weekly Support line and Weekly Trendline.
Anchor Time Frame Weekly
Trading Time Frame: Daily.
Entry Price: 126.701
Stop Loss: 138.469
Take Profit 1: 112.960
Take Profit 2: 100.426
Take Profit 3: 1.10239
Risk Reward Ratio TP1: 1: 1.7
TP2: 1: 2.17
Methodology
As an accomplished and highly knowledgeable forex expert with extensive experience in trading various financial instruments, including crypto and stocks, I shall employ a meticulous methodology that entails a comprehensive examination of the price action and critical levels, while utilizing a blend of indicators and chart patterns. My approach shall involve seeking out promising trendlines, as well as support and resistance levels that may present opportunities for price reversal, with the aid of our indicators that will serve to substantiate the reliability of our analysis. Once I have completed my assessment, I will ascertain the optimal entry and exit points for our trades, in addition to determining the most suitable stop loss level that will enable us to prudently manage risk.
Analysis
My analysis of the USD JPY chart reveals a clear Head and Shoulders pattern on the weekly timeframe, supported by a bearish divergence seen on the RSI indicator from the left shoulder to the head price. Despite the price struggling on a daily support line, there are no strong indications from the daily and weekly RSI to suggest a breakdown of this support at this time. I anticipate that the price may rise to encounter resistance in order to expand the width of the right shoulder and create a double top pattern prior to breaking the current support level.
Once the support level is breached, the next move will be to proceed with a breakout of the Head and Shoulders pattern, which may potentially lead to a breach of the next strong weekly support and weekly trendline that has been in effect since December 2020. My sell stop entry will be executed once this breakout occurs, following the conclusion of the ongoing tug-of-war between the bulls and bears. This entry will be akin to a smooth descent, much like jumping down from a waterfall.
Conclusion:
Drawing from our analysis, I have identified a viable opportunity for a short trade. My take profit targets are situated at key support levels on the chart, namely S1 and S3. The RRR at S1 is 1:1.7, while S3 offers a more balanced risk to reward ratio of 1:2.17. My strategy will entail securing partial profit at R1 before trailing the stop loss to the entry point.
Overall, I am optimistic about the success prospects of this setup based on our technical analysis. However, it is imperative to remain vigilant and closely monitor the price action to make any necessary trade adjustments in response to new information that may emerge.