GBPJPY: 2 Profitable Trades and New Selling Opportunity
British Pound/Japanese Yen FX:GBPJPY
Let’s look at the 4H chart of GBPJPY . The pair gave us 2 profitable trades when we could open long positions in the direction of the main trend. How could we catch that upward movement?
We had to wait for reversal signals from SMAs and open long positions based on breakouts above the local downtrend lines. Stop orders for those trades we had to place below the local swing lows and SMAs . Profit targets we could use at resistance levels.
The words above describe a simple setup that you can use in trend market conditions in any market and timeframe. The principles will be the same.
Now, let’s look for a trading signal which is against the main trend. The price reached the resistance zone at 139.00 level. The price bounced from the zone. RSI and MACD confirmed the price reversal. We can open short trades following a bearish divergence, which is a solid trend reversal signal.
Here is an example of a short trade:
Sell below 138.625
Stop above 139.350
Profit Target at 136.550
Risk per trade must be no more than 1-2% from your trading capital.
If the price moves above the local swing high, we will have to search for new trade opportunities.
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
Source: TW DLavrov