USDJPY Long - The 30/200 Pinch
Updated
Entry - 108.38
Take Profit - 109.28 - 90 pips
Stop Loss - 107.88 - 50 pips
Straight away, you'll notice this is not an ideal risk to reward ratio, but I've found the 30/200 pinch to be somewhat reliable in my back-testing. On the 4H chart, price has appeared to have made the turn for an extended reversal. The 200MA (blue line) has been breached and we're seeing lower lows. This tends to draw in counter-trend retail traders, which gives the bigger fish an opportunity to catch shorts. The long wick on the previous candle is an indication to me that more than a few traders jumped on that extension down and were caught off-guard. The price reacted strongly off of my S&R line (light blue), which is drawn on the monthly timeframe.
In my experience, when the trend appears to be reversing, and the 30EMA (green line) and 200MA close the gap and "pinch", price jumps against the recent PA. My TP is fairly conservative for the situation and is situated between the moving average lines. SL is below the previous low.
I'm not opening a large position, as I'm primarily a trend follower and this is relatively unorthodox for my main style. It's possible the break of the 200MA is too much and JPY pairs tend to pick a direction and march, but I'm willing to take a risk. I'll provide updates or comments if I note anything interesting as this continues.
Thank you for looking!
-Zedro
Take Profit - 109.28 - 90 pips
Stop Loss - 107.88 - 50 pips
Straight away, you'll notice this is not an ideal risk to reward ratio, but I've found the 30/200 pinch to be somewhat reliable in my back-testing. On the 4H chart, price has appeared to have made the turn for an extended reversal. The 200MA (blue line) has been breached and we're seeing lower lows. This tends to draw in counter-trend retail traders, which gives the bigger fish an opportunity to catch shorts. The long wick on the previous candle is an indication to me that more than a few traders jumped on that extension down and were caught off-guard. The price reacted strongly off of my S&R line (light blue), which is drawn on the monthly timeframe.
In my experience, when the trend appears to be reversing, and the 30EMA (green line) and 200MA close the gap and "pinch", price jumps against the recent PA. My TP is fairly conservative for the situation and is situated between the moving average lines. SL is below the previous low.
I'm not opening a large position, as I'm primarily a trend follower and this is relatively unorthodox for my main style. It's possible the break of the 200MA is too much and JPY pairs tend to pick a direction and march, but I'm willing to take a risk. I'll provide updates or comments if I note anything interesting as this continues.
Thank you for looking!
-Zedro
Trade closed manually
Taking early profits (~ 50 pips) to be safe. It's possible that this trade will work out, but I closed it at 108.870 due to the definitive cross of the 30 and 200 moving averages. I was expecting more of a push yesterday, and although that last 4H wick is in favor of my trade, with NFP coming up I'm not 100% confident it's a great idea to keep this open. Not terrible, but I'd consider this a mediocre and flawed trade.
Note
Should have held on. Ooh well.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.