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USD/JPY breakout trade

Discussion in 'General Forex Talk' started by Ricex, Mar 3, 2010.

  1. Ricex

    Ricex Sergeant

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    Hi,
    this is a dollar yen trade that I took yesterday, it is still open but I thought I would try to present it as it happened, in stages. The trade actually lacks momentum now but we'll see what happens. As always it's trading with the 4hr trend.

    usdjpy 20310.

    So taking it from the beginning we look at what the market is doing. Here we can identify a ranging price action of around 60pips.

    usdjpy breakout.

    The price breaks out of the range and also breaks a previous swing low which was put in place before the price started it's range bound activity.

    usdjpy breakout 2. usdjpy breakout 3.

    As the price moves away what we don't want to do is chase it. Placing a sell limit order allows us to wait for the price to retrace to a level we are happy to enter at. If on some occasions the price really shoots away then we would just have to reconsider the trade and look for an alternative entry point.
    A mental Stop loss is placed 35pips away. For me if price reaches this level the trade will have been deemed a fail.

    usdjpy breakout 5.

    The momentum of the move did not carry through as hoped but the price action has not shown that it wants to move higher either, so we have to be patient.

    At the break of yesterdays low on this pair I have now put in a real stop loss at breakeven. This trade is now what we call a free trade, and it allows us to go off and find other trades (better trades maybe!) without any worry of increasing risk on our account.

    Take profit levels are 88.25, 88.00 and if we could get there 87.65. All previous major support levels.
     
  2. Ricex

    Ricex Sergeant

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    usdjpy breakout 6.

    So I finally got out of this trade for 30pips in total, I have to ask was it worth the effort! thankfully other trades have been more fruitful today.

    This has turned out though to be a possible good example of a trend turn. Nothing is confirmed as yet, we need to see more momentum to the upside for it to be taken seriously, but the this initial steep climb is indicative of a trend reversal type price pattern, or at the least the start of a major retracement.

    As far as I can work out it may have been the 3 mth YEN LIBOR that fell below the dollar rate triggering the rapid turnaround. Whatever it was, this vertiginous ascent is something to keep an eye on to see how it develops.

    50% first profit target, and then basically binned the trade as it was going nowhere.
     

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