Friends,
Good shorting opportunity on the USDJPY here. This chart is very simple in nature, and I hope it show traders that even the most basic knowledge can give good and high probability trading set ups (If applied at the right times), you don't always have to use complicated analysis to make trading decisions. This is a lesson, and a very good short trading idea in one.
Right, now onto the trading setup.
We have had an price top, and now i'm looking to the short side, and we have had a spinning top, followed by a strong bearish engulfing candle, followed again by another strong bearish candle. Todays candle broke the trigger line, which has given an ideal shorting opportunity to the downside. If the candle breaks the 108.30's level cleanly, then this should be a good probability move. The next resistance after that would be the 20 EMA and then the 50 EMA and so on.
There have been 2 incidents in the stochastic, (both incidents are shown in the black rectangles), these incidents show messy activity at the oversold level I measured the previous move that occurred when the mess previously happened, I then cloned the reaction size and and applied it to the current move which is the right size for the target to be the support line, there could be buying opportunities in the future. But for now, we are bearish.
I like using this set up because the stop loss would always be where you bought it, so you'd either lose a little, or make money. I'll put another idea up sometime to demonstrate the effectiveness of this idea.
All I have used to make this good probability set up is a stochastic, basic candle knowledge and basic support lines. This did occur by accident, but the point is, you don't have to use complicated ideas to make accurate trading assumptions! And there's up to 300 pips of possible profit here. The lesson here is that simple ideas like this one are just as effective as the most complex ideas if they're used properly.
Line values:
-Orange line= 200EMA
-Blue line= 20EMA
-Red line= 50 EMA
Good luck traders.
Tom
Good shorting opportunity on the USDJPY here. This chart is very simple in nature, and I hope it show traders that even the most basic knowledge can give good and high probability trading set ups (If applied at the right times), you don't always have to use complicated analysis to make trading decisions. This is a lesson, and a very good short trading idea in one.
Right, now onto the trading setup.
We have had an price top, and now i'm looking to the short side, and we have had a spinning top, followed by a strong bearish engulfing candle, followed again by another strong bearish candle. Todays candle broke the trigger line, which has given an ideal shorting opportunity to the downside. If the candle breaks the 108.30's level cleanly, then this should be a good probability move. The next resistance after that would be the 20 EMA and then the 50 EMA and so on.
There have been 2 incidents in the stochastic, (both incidents are shown in the black rectangles), these incidents show messy activity at the oversold level I measured the previous move that occurred when the mess previously happened, I then cloned the reaction size and and applied it to the current move which is the right size for the target to be the support line, there could be buying opportunities in the future. But for now, we are bearish.
I like using this set up because the stop loss would always be where you bought it, so you'd either lose a little, or make money. I'll put another idea up sometime to demonstrate the effectiveness of this idea.
All I have used to make this good probability set up is a stochastic, basic candle knowledge and basic support lines. This did occur by accident, but the point is, you don't have to use complicated ideas to make accurate trading assumptions! And there's up to 300 pips of possible profit here. The lesson here is that simple ideas like this one are just as effective as the most complex ideas if they're used properly.
Line values:
-Orange line= 200EMA
-Blue line= 20EMA
-Red line= 50 EMA
Good luck traders.
Tom